Investing Update: Did You Write Off The Mag 7?
What I'm buying, selling & watching
The S&P snapped its three week winning streak, falling 1.6%. Only the third down week since the end of March, and we still haven’t seen back to back down weeks since then.
Chip stocks and AI names led the damage. The Nasdaq took the brunt of it, down 2.9%, while the Dow held up better at -0.9%. Classic rotation out of momentum, not a broad based selloff. Small caps actually shrugged it off better than the majors, with the Russell 2000 down just 0.5% and still sitting on an 18.5% YTD gain, best of the bunch.
The 10 year yield slipped, oil ripped 14.5% on the week, and Bitcoin actually gained 2.6% even as stocks sold off. Gold was the outlier, down 2% despite the equity weakness.
Market Recap
Weekly Heat Map Of Stocks
Sentiment Check
The bulls return!
Inflation’s Surprise Cooldown
Zoom out and you can see just how rare this is. A decade of monthly core inflation readings, and June actually printed negative, only the second time that’s happened since 2017. Everything else on this chart sits comfortably above zero.
Now the headline numbers. Prices rose 3.5% year over year, a sharp step down from May’s 4.2% and well under the 3.8% Wall Street was bracing for. That’s the fastest one month deceleration since April 2020. Not a typo. Strip out food and energy and core inflation landed at 2.6%, down from 2.9% in May and under the 2.8% consensus call.
Cheaper gas drove a lot of this. On a monthly basis, headline prices actually dropped 0.4%, the steepest single month decline since May 2020. Energy alone dragged the print down by nearly half a point.
But I don’t want to hand this whole print to energy. Gasoline fell almost 10% in the month and did the most damage, but a handful of other categories chipped in too, apparel, electricity, even motor vehicle insurance all came in negative.
Here’s the part that actually gets my attention. Core CPI barely budged month over month, coming in flat and missing the +0.2% estimate by a wide margin. And it wasn’t just one category dragging the number down, shelter and medical services both cooled off too. A single soft reading here or there is noise. When shelter, a number that almost never moves, starts rolling over alongside everything else, that’s a trend the Fed has to take seriously.
Markets clearly agreed, odds of a July hike backed off fast on this release. If the next couple prints confirm this isn’t a fluke, the rate conversation shifts from “how high” to “how soon do they cut.”