MW The next two weeks could bring a bumpy ride for U.S. stocks. Buy any dip, says this strategist.
By Barbara Kollmeyer
Citadel strategist sees path of least resistance being higher for equities.
Temporary hurdles for stocks are ahead, but a Citadel Securities says investors should expect gains after July.
Stocks look ready to bounce on Thursday, as the shock of a more hawkish-than-expected Federal Reserve Chair Kevin Warsh may be wearing off just a little.
Brushing that aside, at least for now, seems worthwhile given markets have bigger immediate fish to fry that have nothing to do with the Fed, based on our call of the day from Citadel Securities' head of equity and equity derivatives strategy, Scott Rubner.
One of the "most technically important periods of the year" is dead ahead, and in that window, flows will matter much more than fundamentals, he told clients on Wednesday.
"The market is set to absorb the largest options expiration in history, significant quarter-end pension rebalancing flows, and a broad reset in positioning across major investor cohorts," he said.
While that could bring with it some near-term bumps, the strategist says to view any volatility "through a technical lens," and use stock dips as buying opportunities. Once we're past the next two weeks and quarter- end, "the setup remains favorable."
"Retail demand is at record highs, ETF inflows continue to accelerate, corporate buybacks remain robust, and the market is entering one of its strongest seasonal periods of the year. We continue to believe the path of least resistance is higher as markets transition into the second half of the year," Rubner said.
That bumpy two weeks kicks off Thursday with a massive, simultaneous expiration of stock options, stock-index futures and stock index options, coming one day earlier than usual due to the Juneteenth holiday.
Rubner said $8.3 trillion of U.S. options are set to expire - 18% larger than the prior record of $7.1 trillion set last December. Those will mark a reset of Wall Street hedging, and resulting orders hitting markets could cause sharp, but short-term market wobbles, he said.
The next big event will be quarter-end portfolio rebalancing at the end of June. The top 100 pension funds are currently 110% funded, their highest since 2001, and some of those will likely de-risk portfolios and try to lock in gains, he said. Mechanical selling of stocks and buying of bonds could happen, but again, don't panic, he said.
Once investors get past these events, the calendar gets more supportive for stocks, said Rubner. July 1 marks the date when retirement contributions, target-date funds, passive allocations, mutual funds and systematic strategies all start putting fresh money to work. That massive pool of assets, can also "drive new market leadership," he noted.
That midyear cycle of flows has historically been tied to a strong July for major equity indexes, specifically in the first half of the month, the strategist said. In each of the last 11 Julys, the S&P 500 has advanced, while the Nasdaq-100 has finished higher in 17 of the last 18 years. Another flow source is ETFs, which have already added more than $1 trillion in inflows year-to-date, 45% ahead of last year's record pace, he said.
An additional tailwind are retail investors themselves. Participation of that group has been historically high in July, and is already at record levels of activity this year, according to Citadel data. July is the second-most active month behind January for that cohort of investors, Rubner said. Citadel executes roughly 35% of all retail volume in the U.S., Rubner said earlier this year.
He said those retail investors are getting more sophisticated. "Rather than only chasing speculative corners of the market, retail investors are increasingly concentrated in the same companies driving benchmark returns and institutional positioning," he said.
Importantly, retail activity is not out of steam, with households holding "record cash balances, waiting to deploy capital on market dips. This dynamic only changes when the VIX VIX rises above 30. Today, the VIX is approximately 16," he said.
Record cash balances in U.S. households waiting to buy the market dip, says Citadel's Scott Rubner
Robust corporate buybacks are a final tailwind investors can keep counting on. More than $925 billion worth of share repurchases have already been authorized so far in 2026, "the strongest pace ever recorded through this point in the year," said Rubner.
Financials and technology have made up 57% of all buybacks so far this year, "reinforcing demand in many of the same sectors benefiting from strong retail participation and passive flows."
The markets
U.S. stock futures (ES00) (YM00) (NQ00) are pointing higher, led by tech. Oil prices (CL.1) (BRN00) are falling and the 10-year Treasury yield BX:TMUBMUSD10Y is also down, along with gold (GC00) and silver (SI00).
Key asset performance Last 5d 1m YTD 1y S&P 500 7420.1 2.11% -0.17% 8.39% 24.06% Nasdaq Composite 26,021.66 3.39% -0.95% 11.96% 33.13% 10-year Treasury 4.462 -1.00 -11.10 29.00 6.60 Gold 4284.7 1.20% -5.71% -1.10% 26.49% Oil 74.52 -13.77% -23.96% 29.80% 0.96% Data: MarketWatch. Treasury yields change expressed in basis points
The buzz
Weekly jobless claims are due at 8:30 a.m., along with the Philadelphia Fed manufacturing survey and leading economic indicators.
Intel shares $(INTC)$ are rallying after President Donald Trump said the foundry will produce chips for Apple in the U.S.
A day earlier, Apple $(AAPL)$ warned prices will rise as the AI boom is driving up memory costs.
Smith & Wesson $(SWBI)$ shares are climbing as surging handgun sales drove a higher profit.
How Pizza Hut fell from stuffed-crust glory to corporate castoff.
The chart
The chart from Bank of America economist Shruti Mishra shows a narrowing gap in total credit card spending, excluding gas, between higher- and lower-income households. That adds to a recent report from the bank showing rising after-tax wage growth for lower- and middle-income households. While it's too soon to confirm whether persistent K-shaped consumer spending - dominated by wealthy households - has shifted, "the data bear watching," she said.
Top tickers
These were the top-searched tickers as of 6 a.m.:
Ticker Security name SPCX SpaceX NVDA Nvidia INTC Intel TSLA Tesla MU Micron AMD Advanced Micro Devices META Meta GME GameStop AMC AMC Entertainment AAPL Apple
The owl behind the 'devil-bird' howl.
-Barbara Kollmeyer
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(END) Dow Jones Newswires
June 18, 2026 06:46 ET (10:46 GMT)
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