Weekly Market Update – June 12, 2026

Quick Takes

• Wall Street wrapped up the week on a positive note, shaking off early volatility as investors kept a close eye on inflation data, central bank moves, and fast-moving geopolitical developments.
• U.S. equities finished higher overall, with smaller companies outperforming their larger peers. The Russell 2000 surged +3.9%, signaling renewed risk appetite, while the S&P 500 and the Nasdaq Composite gained +0.7% each.
• Bond markets saw modest gains as yields declined across most maturities, particularly after geopolitical tensions eased. Inflation remains a concern, but some underlying trends are improving, and Sunday’s U.S.-Iran cease fire should push energy prices lower.

Source: Bloomberg. Data as of June 12, 2026.
Price Returns for Equity, Total Returns for Bonds.
* The term basis points (bps) refers to a common unit of measure for interest rates and other percentages in finance. One basis point is equal to 0.01%. Bond prices and bond yields are inversely related. As the price of a bond goes up, the yield decreases.

Stocks rebound, bonds gain, and the U.S. and Iran reach an agreement

Wall Street wrapped up the week on a positive note, shaking off early volatility as investors kept a close eye on inflation data, central bank moves, and fast-moving geopolitical developments. Here’s what mattered most across U.S. stocks, international markets, bonds, and the broader economy.

U.S. Stocks: Small caps lead, SpaceX steals the show

U.S. equities finished higher overall, with smaller companies outperforming their larger peers. The Russell 2000 surged +3.9%, signaling renewed risk appetite, while the S&P 500 and the Nasdaq Composite gained +0.7% each.

A big storyline was improving sentiment tied to the Middle East. Reports that the U.S. paused military action against Iran—and could be nearing a diplomatic agreement—helped calm markets. That optimism also pushed oil prices sharply lower, easing inflation concerns and supporting stocks.

The week’s headline-grabbing event, however, was the blockbuster IPO of SpaceX. The stock debuted at $150 after pricing at $135 and finished its first day up +19%, reflecting intense investor demand. With a $2.1 trillion market cap, SpaceX now ranks as the sixth-largest U.S. company, just ahead of Tesla, reshaping the top tier of the market.

International Stocks: Mixed results amid central bank moves

Outside the U.S., markets painted a more uneven picture.

Developed markets struggled overall, with the MSCI EAFE Index down -1.0%, though there were pockets of strength. European equities rebounded, as the MSCI Europe ex U.K. Index rose +2.3%, while the U.K. market gained +1.5%. The European Central Bank’s decision to raise interest rates for the first time since September 2023 was widely expected and largely absorbed by investors.

Japan lagged, falling -1.6%, as expectations build for a Bank of Japan rate hike—potentially its first since December 2025. Economic growth there also came in softer than previously thought, with Q1 GDP revised down to +1.8%.

Emerging markets were mostly flat, with the MSCI Emerging Markets Index slipping -0.1%. China declined -0.9% on concerns about an uneven recovery, while Taiwan dropped -2.5%, though it remains up an impressive +56.0% in 2026.

In contrast, Latin America stood out, climbing +4.2%, driven by sharp gains in Peru and Colombia (both up about +12.3%). Political developments in Colombia—where a pro-market candidate outperformed expectations—boosted investor confidence, though uncertainty remains ahead of a June 21 runoff election.

Bonds: Yields fall as investors seek stability

Bond markets saw modest gains as yields declined across most maturities, particularly after geopolitical tensions eased.

The 10-year Treasury yield fell to 4.48% from 4.53% the prior Friday, while the 2-year yield dropped -7 basis points to 4.08% and the 30-year yield slipped -3 basis points to 4.97%. (Remember: when yields fall, bond prices rise.)

That dynamic lifted the Bloomberg U.S. Aggregate Bond Index by +0.5%, reversing the prior week’s losses. Riskier high-yield bonds rose +0.4%. International bonds also posted gains, with the Global Aggregate ex-U.S. Index up +0.3% following a -1.1% drop the prior week.

Economics: Inflation rises, but signals are mixed

The latest economic data delivered a mixed message.

Inflation picked up again in May, with the Consumer Price Index (CPI) rising +4.2% year over year, up from 3.8% in April and the highest since April 2023. However, on a monthly basis, prices have now declined for three consecutive months—a sign that price pressures may be stabilizing beneath the surface.

Core inflation (excluding food and energy) offered some relief as well, rising +0.2%, down from +0.4% in April.

At the wholesale level, inflation was hotter. The Producer Price Index (PPI) jumped +6.5% year over year, fueled in part by a +10.7% surge in energy prices. Monthly PPI rose +1.1%, exceeding expectations.

Meanwhile, other economic indicators showed resilience:

• Existing home sales rose +3.2% in May
• The trade deficit narrowed to $55.9 billion
• Consumer sentiment improved to 48.9, though still relatively weak due to inflation concerns

Looking ahead, all eyes are on the Federal Reserve. New Chair Kevin Warsh will lead his first meeting this week, and while no rate change is expected, markets are watching closely for signals that the Fed may shift to a more dovish stance.

Big picture: Geopolitics driving markets

Geopolitics remained a major driver of market swings. Late-week optimism around a potential U.S.-Iran agreement—possibly reopening the Strait of Hormuz and ending military tensions—pushed oil prices down to $85 per barrel, a drop of $6.75.

And on Sunday evening, early reports of a peace deal sent U.S. stock futures up +1% to +2% and oil lower still, falling below $84.

If sustained, easing tensions could reduce energy costs, improve global trade conditions, and support both stocks and consumer confidence. 

The Bottom Line

The week highlighted a market balancing act:

• Stocks are resilient, with strong IPO activity and improving sentiment
• Bonds are stabilizing, offering diversification as yields edge lower
• Inflation remains a concern, though some underlying trends are improving
• Geopolitics continues to sway markets, especially via energy prices, but a big source of market uncertainty has apparently been allayed

Chart of the Week

The rate of inflation for consumer goods and services was in line with Wall Street expectations in May, with the headline Consumer Price Index (CPI) up +0.5% for the month, down from an unrevised +0.6% rise in April. Year-over-year (YoY), CPI was +4.2%, in line with expectations, but up from the unrevised +3.8% annual rate in April. Core CPI, which excludes the more volatile food and energy prices, increased a modest +0.2% for the month, below expectations for a +0.3% increase and down from an unrevised +0.4% the prior month. YoY Core CPI was +2.9%, matching expectations and up from +2.8% the prior month. The Energy index was up +3.9% for the month and +23.5% for the year, both accelerations from the prior month. The Food index was up +0.2% for the month and up +3.1% for the year, both decelerations. The Shelter component, which is about one-third of the CPI weighting, was up +0.3% for the month and, at +3.4% for the year, little changed from the previous month. The bottom line is that CPI accelerated at the annual headline level but declined for a third straight time month-over-month and not as bad as feared. 

Consumer Prices Declined for a Third Straight Month in May

U.S. Consumer Price Index (CPI), monthly % change (Jan. 2021 – May 2026)

Source: U.S. Bureau of Labor Statistics via CNBC. Data as of June 10, 2026.

The Week Ahead

The markets will be closed Friday for the Juneteenth holiday. The big focus for the holiday-shortened week will be the Federal Open Market Committee (FOMC) monetary-policy meeting on Wednesday afternoon. The FOMC is expected to keep the federal-funds rate unchanged, but it will be the new Chairman Kevin Warsh’s first press conference. Wall Street will be watching closely to see how Warsh plans to approach persistent inflation and whether he shows any more dovish tones than his predecessor. 

Economic data will also be in focus. The May Retail Sales report is also due Wednesday, along with Pending Home Sales and weekly MBA mortgage applications. Monday brings NY State’s Fed Manufacturing Survey, Industrial Production & Capacity Utilization, and the NAHB Housing Market Index. Tuesday has more housing data with Building Permits & Housing Starts plus Import & Export Prices. Thursday wraps up the week with weekly jobless claims, the Philly Fed Manufacturing Outlook, and the Leading Economic Index from the Conference Board.

A trickle of corporate earnings will come in from Accenture, Kroger, CarMax, and Jabil. FedEx Freight is the lone S&P 500 company yet to report, it isn’t scheduled until June 25. Markets could also see heightened volatility on Thursday as triple witching coincides with major index rebalancing activity. 

On the geopolitical front, leaders gathering at the G7 summit in Évian-les-Bains will be learning about the details of the agreement between the U.S. and Iran that was announced Sunday evening and is expected to be signed on Friday, June 19.

Did You Know?

STRENGTH BEGETS STRENGTH – On June 3, the S&P 500 closed more than 5% above its 50-day moving average for the 24th trading day in a row — the longest streak since May 2009 (29 days). Since 1952, there have been 18 other streaks lasting at least 21 trading days; each time, the S&P 500’s median move was +5.4% three months later, with gains 16 of 18 times. (Source: Bespoke)

THE FINANCIAL STRESS DIVIDE – Just 16% of US adults consider themselves “financially fulfilled,” while double that consider themselves “financially stressed.” Those most likely to feel financially fulfilled are Americans with higher incomes, those 65 and older, and married individuals. (Source: Gallup)

RATES UP, DENIALS UP – Higher interest rates not only result in lower mortgage demand but also higher denial rates. In the three years before the Fed’s 2022 rate hikes (2019–2021), originations averaged 4.23 million annually with a denial rate of 12.7%. From 2022 through 2024, the average dropped to 3.20 million (-24%), and the denial rate averaged 15.0%. (Source: St. Louis Fed)

This Week in History

PAPER JAM – On June 12, 1968, the New York Stock Exchange, inundated with trading paperwork and struggling to cope with antiquated record-keeping technology, began closing every Wednesday to allow “back-office” trade processors to catch up with the flood of documents. (Source: The Wall Street Journal)

Economic Review

• May wholesale inflation increased with the headline Producer Price Index (PPI) rising +1.1% for the month, more than the expected +0.7% rise and unchanged from the downwardly revised level the prior month (originally reported at +1.4%). Year-over-year (YoY) PPI increased at a +6.5% rate, up from the +5.7% annual rate the prior month (revised lower from the originally reported +6.0%). That was a tick above Wall Street expectations for a +6.4% annual rate. Core PPI, which strips out volatile food and energy costs, was up +0.4% for the month, below expectations for a +0.5% rise, and down from a +0.7% reading the prior month (revised lower from +1.0%). Core PPI was up +4.9% YoY, below expectations for +5.4% and unchanged from the prior month after being revised lower from +5.2%. The index for Final Demand Goods increased +2.8%, its largest increase since December 2009, when it was first calculated. 80% of that advance was attributed to a +10.7% increase in prices for final demand energy. That was up from +1.9% the prior month. The index for Final Demand Services was up +0.3%, down from +0.7% the prior month. The bottom line is that the PPI in May didn’t show much relief, though the prior month numbers were largely revised lower. 

• The preliminary reading of the University of Michigan Consumer Sentiment Index increased to 48.9 in June from a final reading of 44.8 the prior month and beating expectations to rise to 48.0–a historic low. In the same period a year ago, the index stood at 60.7. The Current Economic Conditions component rose to 48.4 from 45.8 the prior month and beat expectations of 46.1. The Consumer Expectations component improved to 49.3 from 44.1 the prior month, beating expectations to come in at 4.9%. One-year inflation expectations fell to 4.6% from 4.8% and were below expectations to come in at 4.9%. The five-year inflation expectations fell to 3.4% from 3.9% the prior month and were below expectations to be 3.9%.

• The National Federation of Independent Business (NFIB) reported that their Small Business Optimism Index fell to 95.3 in May, down from an unrevised 95.9 the prior month. That was below Wall Street expectations for 96.0 and the lowest reading since October 2024. Of the 10 component indexes, just three increased, while six declined, and one was unchanged. The increases were led by Earnings Trends, which rose +4 points to -15%, and Plans to Increase Inventories, which rose +3 points to +1%.  The decliners were led by Current Job Openings which fell -5 points to +29% and Plan to Increase Employment which fell -4 points to +9%. Expect Economy to Improve fell to its lowest since October 2024. The separate Uncertainty Index rose +3 points to 91, near the highest level since September 2025. “AI investment spending has contributed to some excitement in the economy,” said NFIB Chief Economist Bill Dunkelberg. “Despite the enthusiasm around AI, the overall picture is divided. More small business owners are struggling with significant and unpredictable hikes in fuel prices, which are more challenging for small businesses to pass on to their customers compared to their larger corporate competitors.”

• The National Association of Realtors (NAR) reported that Existing Home Sales increased +3.2% in May to a seasonally adjusted annual rate of 4.17 million units, above expectations for 4.07 million units and up from the 4.04 million units reported the prior month (revised up from 4.02 million units). That was the most since December. Year-over-year existing sales were up +3.2% versus the +0.1% annual increase the prior month. The Median Existing Home Price increased +1.3% from the prior year to $429,300, marking the 35th consecutive month of year-over-year increases. The Inventory of Homes for Sale was up +3.3% from the prior month to 1.55 million units. Unsold Inventory sits at a 4.5-month supply, up from 4.4 months the previous month. This remains below the 6.0-month supply typically associated with a more balanced market. The Median Time on Market for properties was 29 days, down from 32 the previous month and compared to 27 a year ago. First-Time Buyers accounted for 35% of sales, up from 33% the previous month. Cash Sales accounted for 25% of transactions, unchanged from the prior month. For the month, no regions fell with the Midwest up the most at +6.4%, the South was up +3.2%, the Northeast increased +2.2%, and the West was unchanged (0.0%).

• The Census Bureau reported Wholesale Inventories rose +0.6% to $940.3 billion in April, matching expectations for and up from +0.5% in the preliminary reading. Year-over-Year (YoY) inventories were up +3.4%, above the +3.1% annual rate the prior month. That is well below the typical +4% to +6% annual increase in strong economies. Inventories are goods produced for sale that have not been sold yet. Wholesale Trade Sales rose +2.0% to $789.1 billion, after rising +3.0% the prior month (revised up from +2.8%), and easily beat expectations for a +1.2% increase. YoY sales were up +10.9%, up from the +8.7% annual rate the prior month. Wholesale inventories data isn’t adjusted for inflation. The Inventory-to-Sales Ratio ticked down to 1.19 months from 1.21 months. The ratio reflects how long it would take a company to sell all the goods sitting on warehouse shelves.  

• According to the US Census Bureau, the US Trade Deficit for April narrowed to -$55.9 billion from -$56.6 billion in March (revised from -$60.3 billion), a -7.4% change. That was better than the -$56.1 billion deficit Wall Street expected. Smaller trade deficits help contribute to economic growth, while larger deficits inhibit growth. Exports were $327.1 billion, an +$8.3 billion increase from the prior month (+2.6%) and a new all-time high. Imports were $383.0 billion, or +$7.6 billion more than in March (-0.3%). Adjusted for inflation, real goods deficit decreased by $1.5 billion (1.8%) to -$84.3 billion. Overall, the report showed exports were concentrated in crude oil and other petroleum products that were boosted by the supply disruptions tied to the nearly closed activity in the Strait of Hormuz.

• Weekly MBA Mortgage Applications jumped +10.8% for the week ending June 5, following a -2.5% drop the prior week. The Purchase Index increased +7.3% after slipping -2.9% the prior week. The Refinance Index surged +15.3% after a -2.3% dip the prior week. The average 30-Year Mortgage Rate rose to 6.60 % from 6.57% the prior week.

• Weekly Initial Jobless Claims rose by +4,000 to 229,000 for the week ending June 5, which was worse than expectations for 220,000. The prior week had no revision. The number of people already collecting unemployment claims (i.e., Continuing Claims) rose by +24,000 to 1,795,000 for the week ending May 29, which was worse than expectations for 1,785,000. The prior week’s reading was revised lower by -6,000. 

Asset Class Performance

Source: Bloomberg.
Asset‐class performance is presented by using market returns from an exchange‐traded fund (ETF) proxy that best represents its respective broad asset class. Returns shown are net of fund fees for and do not necessarily represent performance of specific mutual funds and/or exchange-traded funds recommended by The Retirement Planning Group. The performance of those funds may be substantially different from the performance of the broad asset classes and to proxy ETFs represented here. U.S. Bonds (iShares Core U.S. Aggregate Bond ETF); High‐Yield Bond (iShares iBoxx $ High Yield Corporate Bond ETF); Intl Bonds (Vanguard Total International Bond ETF); Large Growth (iShares Russell 1000 Growth ETF); Large Value (iShares Russell 1000 Value ETF); Mid Growth (iShares Russell Mid-Cap Growth ETF); Mid Value (iShares Russell Mid-Cap Value ETF); Small Growth (iShares Russell 2000 Growth ETF); Small Value (iShares Russell 2000 Value ETF); Intl Equity (iShares MSCI EAFE ETF); Emg Markets (iShares MSCI Emerging Markets ETF); and Real Estate (iShares U.S. Real Estate ETF). The return displayed as “Allocation” is a weighted average of the ETF proxies shown as represented by 24% U.S. Bonds, 10% International Bonds, 6% High Yield Bonds, 13.8% Large Growth, 13.8% Large Value, 3.6% Mid Growth, 3.6% Mid Value, 1.2% Small Growth, 1.2% Small Value, 16.8% International Stock, 4.2% Emerging Markets, 1.8% Real Estate.
* The term basis points (bps) refers to a common unit of measure for interest rates and other percentages in finance. One basis point is equal to 0.01%. Bond prices and bond yields are inversely related. As the price of a bond goes up, the yield decreases.