Markets Return Volatile After the Long Weekend 06/07/2026

 HOT stories for today

Market wrap:

• U.S. stocks ended the shortened holiday week higher, with the Dow Jones Industrial Average climbing nearly 2% and moving within striking distance of the 53,000 level, a milestone it has never reached. The S&P 500 advanced 1.8% for the week, while the Nasdaq Composite gained 2.1%, as investors rotated into broader areas of the market despite continued weakness in semiconductors. Chip stocks, which have driven much of this year’s rally, remained under pressure. The VanEck Semiconductor ETF (SMH) fell 3.2%, marking its second straight weekly decline as traders reduced exposure to some of the year’s biggest winners. 
• Thursday brought a fresh record high for the Dow, even as weaker jobs data raised concerns about the labor market. The S&P 500 finished nearly flat, while Apple and other large-cap names helped keep sentiment supported. Labor-force participation fell to its lowest level in nearly 50 years outside the Covid period, adding to expectations that softer payroll data could strengthen the case for the Federal Reserve to remain on pause. Still, the softer data did not lift all areas of the market. Stocks that had benefited from crowded positioning, particularly in AI and semiconductor-related names, continued to face selling pressure. Asia-Pacific markets traded mixed Monday as investors reassessed AI-driven trades and looked ahead to the release of minutes from the Federal Reserve’s June meeting later this week.

AI Rally Gives Way to Market Rotation

• Momentum stocks are starting to lose steam after a powerful AI-fueled rally, raising expectations for a broader market rotation beneath the surface of the S&P 500. The Invesco S&P 500 Momentum ETF (SPMO) surged 44% in the second quarter, its strongest quarterly performance since launching in 2015, before falling 6.6% in the first trading sessions of July. Semiconductor stocks have led the pullback, with the Invesco PHLX Semiconductor ETF (SOXQ) down 11.4% this month as investors take profits following a historic run. The reversal highlights the market’s heavy dependence on AI and chip-related names. Massive spending by hyperscalers on artificial-intelligence data centers has fueled strong earnings expectations for semiconductor companies, but it has also created concentration risk across major indexes. 
• Strategists say the rotation may be healthy rather than bearish, as investors appear to be shifting capital into other areas of the market instead of exiting equities altogether. Some beaten-down software and quality growth names have started to rebound as semiconductor leaders come under pressure. Still, July could bring more volatility. Momentum stocks have historically struggled during the month, and the AI buildout continues to raise questions around inflation, supply constraints and elevated earnings expectations. For now, the broader bull market remains intact, but leadership may continue to shift as investors reassess crowded AI trades and look for opportunities beyond the year’s biggest winners.

Stocks on the move:

• Tesla (TSLA): Shares fell 7.5% on heavy volume despite stronger-than-expected deliveries. Tesla delivered 480,126 vehicles, topping estimates of about 406,000, while energy storage deployments rose to 13.5 GWh from 8.8 GWh in the first quarter.
• Strategy (MSTR): Shares jumped nearly 8% as a rebound in Bitcoin renewed appetite for crypto-linked equities.
• Apple (AAPL): Shares climbed almost 5% after hopes for a China memory waiver eased concerns over potential cost pressures.
• SELLAS Life Sciences (SLS): Shares rallied about 11% as investors looked ahead to the final AML readout from its REGAL trial.
• Moderna (MRNA): Shares gained 10% after renewed hopes around flu-shot approval helped lift sentiment across biotech names.

Watchlist: META, TSLA, MSTR, AAPL, MRNA, LMT, MU, SNDK

Key Economic Events Today:

EST time

09:45 am: USD Final Services PMI
10:00 am: USD ISM Services PMI
11:00 am: FOMC Member Waller Speaks


Earnings

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The TEFS Analyst team wishes you a successful day!