Wall Street will say goodbye to one of its most eventful quarters on record Tuesday, with stocks rising the most in six years, a war with Iran swinging oil prices by around $45 a barrel, tech indexes soaring to staggering record highs, and the dollar regaining its dominance among global currency peers.
The Nasdaq is on pace to cap a three-month gain of around 20%, the tech-benchmark's best performance since 2021, paced by a stunning 80% gain for the chip sector index that has defined the market's bull thesis for much of the year.
The broader S&P 500, meanwhile, is set to close out the quarter with a 14% surge, offsetting to some degree its 'June Swoon' of around 1.8%.
The gains are staggering when seen through the prism of both the U.S. war with Iran as well the continued questions about a bubble in artificial intelligence investments, which are forecast to reach $7.6 trillion over the next five years.
Yet there are signs of concern.
Each of the stocks in the Magnificent Seven cohort have fallen into correction territory, even as analysts bet the group, as well as a handful of AI suppliers, will comprise around 75% of the S&P 500's second-quarter earnings growth.
The fragile truce in the U.S.-Iran war could unravel at any moment, stoking energy prices and inflation pressures, while a new Federal Reserve boss will overhaul the central bank's market communications.
Wall Street is still bullish on stocks over the second half of the year but sees diminishing returns over the next six months as many of these issues play out.
"Past performance is no guarantee of future returns," is the investment world's boilerplate caveat. It might be the best summation of a historic quarter that will be nearly impossible to match.
-- Martin Baccardax
Get more of the journalism you love. Choose Barron's as a preferred source in Google.
Trump's Control Over Federal Government Gets Split Decision
President Donald Trump's efforts to take greater control of the federal government got a split decision from the Supreme Court, which rejected his bid to fire Federal Reserve governor Lisa Cook without due process while giving Trump the ability to fire federal agency officials by a favorable ruling in another case.
-- Both decisions were written by Chief Justice John Roberts. The 5-4
decision in the Cook case upholds lower courts' rulings and is widely
viewed as reinforcing the central bank's independence in setting U.S.
monetary policy. Trump has vowed to keep pursuing her termination.
-- The Court also ruled on a separate challenge brought by Rebecca Slaughter,
who contested Trump's removal of her from the Federal Trade Commission.
The justices held that the FTC's "for cause" removal protections violate
the Constitution's separation of powers.
-- Cook launched her legal battle on Aug. 28, after Trump tried to remove
her from the Fed, accusing her without evidence of making false claims on
mortgage documents in 2021, before she became Fed governor. Cook argued
that the government didn't provide evidence to justify a "for cause"
removal.
-- Monday's majority opinion noted that its ruling was "narrow" and largely
centered on the president's failure to give Cook the notice and some
opportunity to respond before her termination. Cook said that she was
grateful for the Court's ruling.
What's Next: Roberts said that accepting the government's arguments would disagree with the tradition of central banking protected from political interference. Cook will stay at the Fed while the district court decides the merits of the "for cause" removal and as her legal case continues. Her 14-year term runs through January 2038.
-- Megan Leonhardt and Janet H. Cho
Comcast's NBC Spinoff Could Spark More Media Deals
Wall Street has been hoping for the move Comcast is making to separate its NBCUniversal division for several years given the stock's conglomerate discount -- disparate businesses under one roof tend to trade at a discount to a sum-of-the-parts valuation. Now, people are wondering if more media deals are coming.
-- Netflix, which lost a bidding war for Warner Bros. Discovery to Paramount
Skydance, might be interested. NBCUniversal operates a movie studio,
streaming, and parks, plus European and U.S. broadcasting businesses.
Comcast is keeping up to a 19.9% stake in the newly formed media entity.
-- Incoming NBCUniversal CEO Michael Cavanaugh, said on a conference call
Monday that separation isn't a step toward other strategic transactions,
according to Benchmark analyst Matthew Harrigan. NBCUniversal could
benefit from a merger on the streaming business since Peacock is
undersized relative to Netflix.
-- Harrigan says the split will assign fairer immediate value to the studio
and parks businesses. It also creates an essentially pure-play cable and
broadband company. That already has sparked speculation about a
combination of Comcast and the number two cable company Charter
Communications.
-- There also was a report Friday on Bloomberg about a potential wireless
arrangement between SpaceX's Starlink and Charter that would compete with
wireless giants AT&T, Verizon, and T-Mobile US. The split also could help
Comcast offer cheaper wireless-broadband bundles versus the "Big Three"
carriers.
What's Next: The backdrop for the Comcast spinoff is tough, however, as broadband competition heats up. SpaceX's satellite service already has about three million U.S. subscribers and plans a big push once its powerful new satellite network is in orbit.
-- Andrew Bary, Mackenzie Tatananni, and Adam Clark
All Eyes on Beer Sales Momentum at Constellation Brands
As Constellation Brands prepares to report May quarter results later today, investors want to know whether its beer business has regained momentum. Alcohol demand has been weak for several years, and Constellation Brands has faced softer demand from Hispanic customers, who make up nearly half of its base.
-- The maker of Modelo Especial and Corona reports after tonight's closing
bell. Wall Street analysts polled by FactSet expect sales to fall 5% from
a year ago to $2.39 billion, while earnings are expected to come in at
$3.19 a share, down about 1% from a year earlier.
-- Alcohol demand has been hit by economic uncertainty, making consumers
more cautious about discretionary spending. The company's last quarter
offered some reason for hope. In the fiscal fourth quarter ended in
February, sales fell 11% from a year earlier, but much of that was from
the wine and spirits segment.
-- Beer sales in the fourth quarter increased about 1% from the year-ago
period, marking a return to growth after many quarters of weakness.
Management said Hispanic consumers were showing signs of recovery. Modelo
has continued to gain market share, Constellation said, while Victoria
beer is gaining traction among younger Hispanic consumers.
-- Beer is still highly profitable, but profitability has been moving the
wrong way. In the fourth quarter, beer operating margin fell to 33.2%
from 36.6% a year earlier. Lower sales volumes make fixed costs harder to
spread out, while U.S. tariffs on aluminum cans further squeezed margins.
What's Next: Constellation has sold many of its mainstream wine brands to keep a more premium portfolio. It's also leaning harder into imported Mexican beer, craft spirits, and low- or no-alcohol products and targeting more than $200 million in yearly cost savings by fiscal 2028.
-- Evie Liu
Reasons Not to Abandon Retail Stocks Despite Inflation
It was supposed to be the year of the consumer, but that hasn't really panned out. People are still spending, but inflation will remain a challenge for retailers, and a potential interest rate increase could weigh on sentiment. The second degree impact of inflation has yet to play out.
-- Bernstein analyst Zhihan Ma notes that tax refunds were much smaller than
anticipated, and packaging costs (as measured by plastic and resin) have
risen 18% from a year ago. These factors, and a potential new round of
tariffs, suggest that inflation is here to stay, Ma wrote Monday.
-- Consumer sentiment is near all-time lows, lower-income consumers are
feeling pressured, and middle- to high-income consumers are trading down
for value. Ma's retail stock picks include Costco Wholesale, noting its
strong comparable sales and a potential special dividend, and Dollar Tree,
which is seeing higher-income shoppers.
-- 22V Research President Dennis DeBusschere wrote that retail is due for a
"catchup," boosted by artificial intelligence. He said retail
fundamentals "strengthened meaningfully" during first-quarter earnings
season, with more than 85% of State Street SPDR S&P Retail ETF stocks
posting earnings beats.
What's Next: AI-driven e-commerce sales -- including from Amazon, Walmart, eBay, Etsy, and other retailers -- are expected to be over $2 trillion next year and nearly $2.6 trillion by 2030, DeBusschere wrote. AI users are the leading edge of the margin recovery under way.
-- Teresa Rivas and Janet H. Cho
-- Newsletter edited by Liz Moyer, Patrick O'Donnell, Rupert Steiner
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
June 30, 2026 06:25 ET (10:25 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
Comments