Semi Shocker; Micron, Intel, AMD Hit Home Runs; Warsh Gets to Work
Let’s pop open the hood and look at the market in June and Q2 to zero in on the winners; also, why we must watch the new Fed head closely today.
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It’s a Sunshine Day
I think I’ll go for a walk outside now
The summer sun’s callin’ my name
I hear ya now, I just can’t stay inside all day
I’ve gotta get out, get me some of those rays
Everybody’s smilin’
Sunshine day
Everybody’s laughin’
Sunshine day
Everybody seems so happy today
It’s a sunshine day
– Stephen McCarthy (The Brady Bunch), 1972
What a Quarter!
Pencils down. The second quarter of 2026 came to completion on Tuesday afternoon as the closing bells down at 11 Wall St. and up at Times Square peeled their last. There certainly was some volatility, as the quarter did begin under the fog and haze of war, not to mention the unwelcome impacts of both consumer-level inflation and labor market uncertainty. That said, one could not argue that as the three-month period wore on, both market and economic conditions improved greatly.
Capital poured into U.S. financial markets throughout the April through June time-frame, largely through the use of passive investment vehicles and not just into stocks. Over the past six weeks or so, the U.S. Ten-Year Note went from yielding as much as 4.68% to 4.45% last night, despite a stance taken by the Fed under new Chair Kevin Warsh that was probably a little more hawkish than some expected and certainly less dovish than others had hoped.
It was indeed equities, though, that stole the show. Yes, the S&P 500 did give back 1.06% for June, but the broadest of U.S. large-cap indexes managed a gain of 14.87% for second quarter 2026. The Nasdaq Composite? Gave up a nasty-looking 2.81% for June but added 21.41% for April through June in aggregate. Suddenly, recent bumps in the road don’t really seem too rough, do they?
Check this out. We’ll pop the hood and look at the engine of market activity. The big-tech / AI / Memory trade through the prism of the Philadelphia Semiconductor Index? (The hyperscalers / Magnificent 7 mega-caps certainly weren’t kicking down doors for us.) Those semis were up 11.05% for June and up 87.74% for April through June.
That, my friends, is not a misprint. Imagine not having had a healthy exposure to that trade over that period? Gee whiz. Not like we didn’t talk about it often enough. For the quarter, Micron (MU), Intel (INTC) and Advanced Micro Devices (AMD) added 271.06%, 215%, and 208.51% respectively. True story. If only there were a trader with a cool nickname who writes regularly for TheStreet Pro who also named his family’s portfolio after himself and repeatedly informed readership here and viewers (at Fox Business) throughout the period that he was long these names, even giving those readers target prices. If only.
Marketplace
Tuesday seemed like a strong finish to a strong quarter, even if it also brought a close to a mixed month. Or did it? Tuesday was not nearly as strong a day for U.S. markets as it presented… I guess what I’m trying to say is this… the guts of the market did not match headline level index performance. The S&P 500 added 0.79% on Tuesday while the Nasdaq Composite grew by 1.52%. The Philly Semis were strong again, up an impressive 3.92%, but the Dow Transports and KBW Banks both closed well into the red.
Only four of the 11 S&P sector SPDR ETFs closed out the session in the green, easily led by technology (XLK). The industrials (XLI) also had a strong day. Four sectors managed to lose at least 1% on the day. There was, however, a positive there. Those four sectors were the four defensive sectors, indicating that perhaps investors have become less cautious as we head into July.
That said, the breakdown of market internals for Tuesday will impress not a soul. Losers beat winners by little more than a smidgen at the NYSE, while winners beat losers by a small margin at the Nasdaq. Advancing volume took a 58.9% share of composite Nasdaq-listed trade, but just a 40.2% share of composite NYSE-listed activity. Aggregate trade was higher on Tuesday than on Monday across NYSE-listings, across Nasdaq-listings and across the membership of the S&P 500, but not by much.
The lack of a significant bump in volume from a Monday sandwiched in between a Russell rebalancing and an end of month / end of quarter event signals a real lack of interest in said end of quarter action. Though the S&P 500 did recapture its 21-day exponential moving average and the Nasdaq Composite did recapture both its 50-day simple moving average and 21-day exponential moving average, I would be slow to read much into the past few days, from a technical perspective.
The Chair Speaks…
Hearing from Fed officials during holiday-shortened weeks is not a common event. This group, in the past, has shown a real lack of depth in the ability to interpret developing economic realities and adapt effectively through the implementation of monetary policy. That sounds harsh, but despite their lengthy and supposedly impressive academic resumes, the evidence does not enhance the group’s reputation.
The FOMC, through the decades and through a number of Fed Chairs, has almost always been slow to respond to rising threats to the U.S. economy and has almost never shown any ability to act in an anticipatory way as nearly all of those actually around them who are running business and are hiring / firing must do.
We also, as mentioned above, don’t often hear from this crew around holidays. Ever walk around D.C.? Working for the federal government, which the Board of Governors does, does not exactly appear (this is anecdotal) to inspire a burning desire to put one’s nose to the grindstone. That changes today.
Fed Chair Kevin Warsh will participate this morning in a panel discussion at the ECB Forum on Central Banking from Sintra, Portugal. Traders need to be cognizant of this event. Warsh, who was considered to be something of a policy hawk when first serving on the Board of Governors from 2006 into 2011, came off as somewhat hawkish during his first post-statement press conference in mid-June.
This surprised some. Not because Warsh showed some concern over recent upside
inflationary pressures. He has always been viewed as an exceptional economist. No, but because he had been hand-selected by President Trump for the position and the president is known to prefer, in a big way, lower short-term interest rates.
Personally, I would expect that Warsh might continue to jawbone against those inflationary pressures and might even lean toward a rate hike in fairly short order. This would quiet the neo-hawks who do not even realize that inflation has apexed. Then, he’ll buckle down and focus on sustaining the increased activity that this economy has started to exhibit in recent months.
Economics (All Times Eastern)
07:00 – MBA 30 Year Mortgage Rate (Weekly): Last 6.59%.
07:00 – MBA Mortgage Applications (Weekly): Last 1.0% w/w.
08:15 – ADP Employment Report (June): Expecting 118K, Last 122K.
09:45 – S&P Global US Manufacturing PMI (Dec-F): Flashed 55.7.
10:00 – Construction Spending (May): Expecting 0.3% m/m, Last 0.4% m/m.
10:00 – ISM Manufacturing Index (Dec): Expecting 53.7, Last 54.0.
10:30 – Oil Inventories (Weekly): Last -6.088M.
10:30 – Gasoline Stocks (Weekly): Last +2.064M.
The Fed (All Times Eastern)
09:00 – Speaker: Federal Reserve Chair Kevin Warsh.
Today’s Earnings Highlights (Consensus EPS Expectations)
Before the Open: FDS (4.45), GIS (.80)
At the time of publication, Guilfoyle was long MU, INTC, AMD equity.
