Mag 7 Leads Today’s Recovery as Investors Buy the Dip: June 29, 2026

Risk appetites are rebounding to begin this holiday-shortened trading week as investors look past AI spending worries and add exposure to Magnificent 7 names. Concerns that the massive capital expenditures allocated to the modern technology could fall short of lofty expectations have driven a rotation in the last few days into the cyclically oriented, rate sensitive areas of the market, with the Dow Jones Industrial and Russell 2000 benchmarks recently jumping to fresh records, leaving behind the lagging Nasdaq 100 and S&P 500 indices. But today’s session has the tech sector outperforming, as dip buyers attempt to take advantage of recent turbulence to pick up stocks at lower prices. Meanwhile, easing tensions between Tehran and Washington are lifting sentiment, as subdued crude costs are conducive to decelerating inflationary pressures and a less hawkish Federal Reserve as a result. In equities, 7 of the 11 sectors are advancing while the yield curve remains quite unchanged and the greenback retreats modestly. Commodities and cryptocurrencies are declining, volatility protection instruments are nearly flat and prediction markets are catching bids.

Be Careful With JOLTS

The Job Openings and Turnover Survey (JOLTS) and its accompanying April revision, scheduled for release tomorrow, could lift interest rates and the greenback materially if it builds on the prior print’s 23-month high. Every forecaster surveyed on the Street is expecting a decline, amplifying the potential turbulence associated with an upside surprise. This indicator doesn’t typically jolt the market, but if for-hire signs have risen significantly against the backdrop of elevated inflation, then it will warrant an increasingly hawkish Federal Reserve that will worry less about employment conditions and focus more on price pressures. Such a result, if accompanied by stronger-than-expected results from ADP, Challenger and the government later in the week could set the stage up for a summer of volatility, as the Treasury complex reacts to a labor market that unexpectedly reaccelerated to an on-fire state. Conversely, however, weaker-than-projected figures are likely to be bullish, as limited economic slowdown risks coincide with a dovish tilt in rate-hike expectations.

International Roundup

Japan Retailing Exceeds Expectations, but Consumers Sought Savings

In a sign that Japan consumers have been resilient while the country’s central bank raises interest rates, May retail sales climbed 5.3% year over year (y/y), exceeding the economist consensus estimate of 3.1% and accelerating from 2.8% in April, according to the Ministry of Economy, Trade and Industry. It was the third consecutive month of increases. While consumers shied away from convenience stores that tend to have higher prices, sales among the largest retailers trailed the headline, posting a 5% y/y gain, but the result was still stronger than the 2% y/y growth in April. Large retailers also grew cashier transactions by 1.9% m/m, a deceleration from 2.1% in the preceding month. Sales of cosmetics, pharmaceuticals and vehicles led the growth and seasonal items such as air conditioning also experienced strong demand. After nearly two decades with a 0% interest rate, the Bank of Japan has been tightening its monetary policy in response to higher energy prices. Early this month, it raised its key rate 25 basis points to 1%, a 31-year high. 

May Loan Growth in Europe Was Stronger than Anticipated

Loans to private households in Europe climbed 3.1% y/y last month, exceeding the 2.9% economist consensus estimate and strengthening from April’s 3% expansion, according to the European Central Bank.  Also in May, loan growth to non-financial corporations accelerated from April’s 3.4% y/y rate to 4%.

But UK Debt Issuance Disappoints

Mortgage approvals, net lending and consumer credit in the UK fell below estimates during May. Mortgage approvals sank from 66k in April to 56.2k, missing the economist consensus estimate of 63k. Meanwhile, the value of mortgage debt issued, at £2.89 billion, missed the economist estimate of £4.6 billion and dropped from £4.4 billion in April. Consumer credit also disappointed. At £1.66 billion, it missed the economist consensus estimate of 1.8 billion and fell below April’s £1.71 billion.  From a broader perspective, net lending to individuals weakened from £6.2 billion in April to £4.6 billion. Economists anticipated a decline to £6 billion.