Market Week in Review

Hi, welcome to Market Week in Review for the week ending June 26th, 2026. Uh this week three themes stood out to us across financial markets. Uh the first one and probably the most dominant for asset prices was this tug-of-war that took place between some pretty healthy macro and geopolitical developments, uh but also some challenges in the tech and semiconductor space. Uh starting with the macro picture, which uh I thought was overwhelmingly positive this week. Uh we've started to now see some resumption of shipping activity through the Strait of Hormuz on the back of the US-Iran agreement from a couple of weeks ago. Transit activity has recently accelerated to 2/3 of pre-conflict levels as of Wednesday of this week. And with that resumption of supply flow, uh we're seeing uh a reaction in commodity markets where crude oil and broader commodity prices are down pretty sharply on the week, uh but even more broadly than that for the month and uh the second quarter. This decline in commodity prices is pretty important because it pulls back on one of the major inflation drivers and risks uh that investors have been grappling with here for the global economy now for some time. Uh and so on the back of that we've seen uh sovereign bond yields fall globally uh this week. Um not only in the United States, but actually even bigger moves in the UK gilt market this week that were amplified by comments from officials that the country would likely stick to its fiscal framework, uh and that uh tone was welcomed by investors in the UK. Uh we think this decline in inflation risk should also push back on the need for near-term central bank rate hikes. That's still an open question in uh financial markets, um but supporting that view this week, we had a speech from FOMC Vice Chair John Williams, who indicated that he supported holding rates steady. So, while that sort of macro geopolitical angle was positive, we still had equities, at least as of Thursday's close here in Seattle, that are tracking down roughly 2% on the week. That headline weakness masks a rotation under the surface of the market away from some of the tech and semiconductor names that have run so hard here for a couple of months towards and and with positive performance in more rate sensitive and cyclical exposures in the equity market. The second theme and focus for investors, we're still seeing a lot of attention around the post-IPO trading activity for SpaceX. That stock closed on Thursday at $153 per share, which is pretty close actually to where the security opened after its initial public offering. Um we're hearing some interesting observations from our trading desk around sort of the flow and activity that is driving those moves and really some divergence in retail and institutional flow here. The first few weeks really have been dominated by retail buying, including for bullish expressions through shorter dated call options. Whereas on the institutional side, it seems like investors have been more focused on risk managing their positions with overlay and derivative solutions. The third and final observation is actually looking ahead to this weekend after the close on Friday, FTSE is going to be implementing its semi-annual Russell US Index reconstitution. This looks like one of the more consequential reconstitutions in recent years to us for two reasons. First, some of the small cap technology heavyweights will be graduating into the large cap Russell 1000 index. And then second, within large cap several of the largest mega cap growth companies are going to be shifting into the value indices and reshaping benchmark composition for investors. So those are the key observations from us this week. I hope you have a good weekend and thanks for tuning in. >> Hi, I'm Sophie Antelme head of portfolio and business consulting at Russell Investments. If you liked what you just saw and heard, consider subscribing to our YouTube channel or check us out on LinkedIn. Thanks for tuning in.