Inside The S&P 500's June Swoon And AI Boom, July Fireworks Possible

Summary

  • U.S. large caps cooled in June, with the S&P 500 ETF dipping 1% as Mag 7 megacaps faced selling pressure.
  • SMID caps outperformed, led by a 3% rise in the Russell 2000 ETF, while the Health Care and Industrials sectors led gains.
  • Strong labor market and resilient consumer spending support GDP growth, but inflation likely peaked, and the Fed's next move remains uncertain.
  • The S&P 500 trades just above 20x P/E; concerns rise about peak earnings as AI-driven profit estimates surge, and seasonality favors July upside.

Wall Street street sign in Manhattan financial district

Alexey_Fedoren/iStock via Getty Images

It was a June swoon for stocks. Despite the S&P 500’s (SP500) best quarter in six years, U.S. large caps struggled as the first half drew to a close. Pin the weakness on the Mag 7, as

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About SP500 Ticker

SymbolLast Price% Chg
SP500
7,490.62-0.12%
Chart
Combination chart with 2 data series.
The chart has 1 X axis displaying Time. Data ranges from 2026-06-26 09:30:00 to 2026-07-01 10:00:00.
The chart has 1 Y axis displaying values. Data ranges from 7308.69 to 7504.31.
End of interactive chart.
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Chart
Line chart with 10 lines.
The chart has 1 X axis displaying Time. Data ranges from 2026-06-25 09:30:00 to 2026-07-01 10:10:00.
The chart has 1 Y axis displaying values. Data ranges from -1.2 to 4.67.
End of interactive chart.
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