What Happened in the Markets Last Week
Nasdaq Posts Fifth Straight Losing Session
The Nasdaq fell 4.6% for the week as investors sold out of technology stocks, closing Friday at 25,297.62. The S&P 500 dropped nearly 2% while the Dow bucked the trend, gaining 0.6% on strength in industrial names.
Health Care Beats Tech by 1,272 Basis Points
Health Care (XLV) gained 7.32% on the week while Technology (XLK) fell 5.40%, the widest sector gap of 2026 so far. Defensive sectors swept the top four spots, with Utilities, Real Estate, and Consumer Staples all finishing positive.
June 23 Rotation Swing Hit 600 Basis Points
On Tuesday, XLK dropped 4.13% in a single session while Consumer Staples rose 1.87%, marking the pivot day that defined the week’s direction. Communication services stocks recorded their steepest one-day slide since the April 2025 tariff selloff.
Alphabet, Amazon, Meta Sold Off Hard Monday
Alphabet fell 5% after reports of AI talent departures rattled investor confidence, while Amazon dropped 4.8% and Meta shed 2.3% in the same session. Microsoft also declined 3%, pulling the broader technology sector lower to start the week.
Bio-Techne and Incyte Led Healthcare Surge
Bio-Techne jumped more than 22% on the week and Incyte climbed over 15%, making healthcare the clearest winner as money rotated out of growth stocks. Market breadth improved to 63.3% of S&P 500 names advancing in the back half of the week, even as the cap-weighted index fell.
S&P 500 Weekly Outlook
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Bull Case: What Could Drive the S&P 500 Higher
📉 Yield Curve Normalizing
The 2s10s spread at +27 basis points and the 3-month to 10-year spread at +62 basis points mark a fully upward-sloping curve — a structural shift from prior inversion. Historically, curve normalization has preceded periods where equity risk appetite expands as recession fears recede.
🧱 7,300 Floor Holding
The index has not tested the 7,300 medium-term support level, and the 6,940 deeper floor remains untouched — a sign that institutional demand has stepped in above those levels. A hold above 7,371 into Thursday’s NFP print keeps the path to 7,530 open.
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Bear Case: Risks That Could Weigh on the S&P 500
🔴 7,600 Institutional Sell Wall
The 7,600 level is flagged as a major resistance with an institutional sell-wall — price has already failed there once after the June 2 high. A rejection there without a clean breakout on volume would leave the index in a lower-high structure heading into Q3.
🔥 Core Inflation Still at 3.4%
Core PCE at 3.4% is the highest reading since 2023 and sits 140 basis points above the Fed’s 2% target. Fed Chair Warsh speaks Wednesday in Portugal, and any rhetoric reinforcing a hold-or-hike bias could reprice rate expectations and pressure equities heading into Thursday’s jobs number.
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Key Market Markers
💼 NFP — Thursday, July 2
The jobs report moves to Thursday due to the July 4 holiday, meaning any volatility triggered by the print has no Friday session to absorb it. Traders should expect amplified reactions in either direction with light pre-holiday volume.
🏭 ISM Manufacturing PMI — Wednesday, July 1
ISM Manufacturing has been a leading indicator for S&P earnings expectations in 2025-2026, with readings below 50 historically pressuring industrials and materials. Watch whether the July 1 print extends contraction or shows a recovery toward expansion.
🎙️ Fed Chair Warsh — Wednesday, 9:30 AM ET
Warsh speaks during active trading hours in Portugal, making this the week’s highest-impact Fed communication event. Any deviation from a hold stance at the July meeting — or explicit concern about 3.4% core PCE — will move Treasuries and equities simultaneously.
📈 10-Year Yield at 4.39%
The 10-year holding below 4.40% after the PCE print is a modest positive for equity valuations, particularly in rate-sensitive sectors. A push back toward 4.60%+ on hot jobs data Thursday would tighten financial conditions and put pressure on the S&P’s 7,371 support.
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Bottom Line
The S&P 500 at 7,354 is in a technically precarious spot — above near-term support at 7,371, below the pivot at 7,447, and well short of the institutional resistance wall at 7,600. The week’s outcome likely depends on two prints: Warsh’s tone Wednesday and Thursday’s NFP, both landing with no Friday cushion before the long weekend. Bulls need a hold above 7,371 and a clean reclaim of 7,447 to rebuild confidence in the June recovery; bears need a rejection at the pivot or a hot jobs number to confirm the negative RSI divergence and target a test of 7,300. This is not a week to chase moves in thin holiday volume.
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