Following a holiday-shortened trading week packed with labor market data and a surprising non-farm payrolls report, investors are set for a relatively calmer period. The market is looking to regroup after a mixed performance last Thursday, which saw the S&P 500 close flat, the Nasdaq Composite fall 0.8%, and the Dow Jones Industrial Average gain 1.1%.
Monday is likely the most significant day on the economic calendar, with a series of index readings from S&P Global and the Institute for Supply Management (ISM) offering insights into the state of the U.S. services economy. Ahead of this data, the monthly ADP private payroll figures showed the services sector was the primary driver of job creation in June.
In the corporate sphere, earnings from PepsiCo, Inc. (PEP.US) on Thursday and Delta Air Lines, Inc. (DAL.US) on Friday will be focal points. PepsiCo's results should provide a window into the current state of the American consumer, while Delta Air Lines will offer another perspective on the lasting impacts of the conflict in Iran and the resulting energy crisis.
SK hynix (SKHY) is expected to list on the Nasdaq on Friday, July 10th, in a $29 billion offering that could become the largest U.S. IPO ever for a foreign company.
Jobs Report Clouds Rate Hike Bets
By Thursday, the market had grown increasingly confident that a Federal Reserve rate hike within the year was a near certainty. Then, the June jobs report arrived. The U.S. economy added 57,000 jobs last month, roughly half of what economists had forecast. Concurrently, May's substantial non-farm payroll gain of 172,000 was revised down to 129,000, and April's figure was also adjusted lower from 179,000 to 148,000. This is clearly not the robust labor market performance that Fed Chair Kevin Warsh has been anticipating.
Although markets still envision one Fed rate hike this year following the report, confidence has waned slightly. According to CME data, traders on Thursday morning priced in about a 75% probability of rates being higher by year-end, down from approximately 84% on Wednesday.
In his first press conference following the policy decision, Chair Kevin Warsh emphasized inflation and the goal of returning it to the Fed's 2% target, a challenge that remains difficult amid the energy shock from the Iran war. Despite the soft June jobs data, many economists believe there may not be a particularly strong link between inflation and unemployment at present, keeping the pressure squarely on price data—a point to remember as earnings season approaches.
The First Half AI Story Belonged to Hardware
If one word could describe tech stock trading in the first half of 2026, it would be "imbalanced." The iShares Expanded Tech-Software Sector ETF (IGV), which tracks various stocks within the tech sector, is down 12% year-to-date. Even the "Magnificent Seven," once stalwarts of mega-cap tech, have collectively lost investors 2% over the past six months.
On the other hand, fueled by a frenzy over memory and storage sales and demand for the traditional processors needed to run AI deployments, chip stocks have had an explosive six months. Micron Technology, Inc. (MU.US) is emblematic of this first-half surge, with its shares skyrocketing an astonishing 308%. Intel Corporation (INTC.US), which is in the midst of a transformative restructuring, also posted a stellar 280% gain, while Advanced Micro Devices, Inc. (AMD.US) rocketed 173% over the period.
Aggregating these, the Philadelphia Semiconductor Index (SOX) has delivered investors roughly a 75% return since January 1st. Bank of America tech analyst Vivek Arya suggests this trend is unlikely to change as the physical backbone for AI continues to be built at full speed. It serves as another reminder that while AI may be a product of software-minded Silicon Valley, the AI economy is physical.
Arya wrote in a client note, "We reiterate our thesis that the AI industry is transitioning from having to justify return on investment to addressing structural and physical (chip, power) constraints. Memory chip shortages and price inflation remain critical dynamics."
SK hynix's US Market Debut
The $29 billion U.S. listing plan for SK hynix (SKHY) could become the largest foreign company IPO on record, but it's not solely about raising capital. It's also about competing in one of the hottest segments of the global stock market: memory chips for artificial intelligence (AI) computing.
For years, the South Korea-based semiconductor manufacturer has traded at a discount to its primary U.S. rival, Micron Technology (MU.US). With memory chip makers and other firms producing equipment for AI data centers driving performance in the S&P 500, tapping into the world's deepest equity market and its fervor for all things AI could help close that valuation gap.
For most U.S. investors, betting on SK hynix has been very difficult, if not impossible. Like Micron, which is the second-best performing stock in the S&P 500 this year with a stunning 242% gain, SK hynix benefits from surging demand for high-bandwidth memory (HBM) chips. However, direct ownership of its South Korea-listed shares meant trading during U.S. off-hours.
The expected Nasdaq listing on July 10th should change that and potentially improve the company's lagging valuation. The Korean firm trades at 6.2 times its expected earnings for the next 12 months. Following a 14% stock plunge last week—its worst performance since March—Micron now trades at a price-to-earnings multiple of 7x, but it was above 11x as recently as June 22nd.
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