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June 15, 2026
Good morning,
Markets
For the week ending 6/12/2026:
- The S&P 500 increased 0.6% to close at 7,431.46.
- The yield of the 10-year Treasury bond decreased from 4.54% to 4.48%.
- Oil decreased from $90.54 to $84.88.
- The CBOE Volatility Index (VIX) decreased from 21.51 to 17.68.
- U.S. dollar currency exchange rates were:
- EUR/USD: 1.15 (USD stronger from a week ago)
- GBP/USD: 1.34 (USD stronger from a week ago)
- USD/JPY: 160.10 (USD stronger from a week ago)
Market Headlines
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Stocks Rebound: After a sharp selloff on Wednesday, all three major U.S. indices (S&P 500, Nasdaq, and Dow) recovered to post weekly gains of 0.6% to 0.7%. The midweek decline was fueled by renewed inflation concerns, rising Treasury yields, and escalating geopolitical tensions in the Middle East, while the late-week rebound was supported by lower oil prices and improving sentiment around a potential diplomatic resolution
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Inflation Accelerates: Wednesday’s Consumer Price Index (CPI) report showed inflation accelerated to an annual rate of 4.2% in May, its highest level in more than three years. The increase was largely driven by rising energy costs tied to the conflict in the Middle East, with energy accounting for more than 60% of the monthly gain. Despite the higher annual inflation rate, consumer prices rose 0.5% month-over-month, a slight moderation from April’s CPI report. Core CPI, which excludes food and energy, increased 0.2% for the month, bringing the 12-month core inflation rate to 2.9%.
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Volatile Oil: Crude oil prices were volatile throughout the week as escalating geopolitical tensions initially raised concerns about potential supply disruptions. However, prices moved lower later in the week as optimism surrounding a potential peace agreement with Iran improved. Hopes for de-escalation pushed Brent crude below $83 per barrel on Friday, the lowest level since mid-April.
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Small Cap Rally Continues: Small-cap stocks outperformed broader equity markets during the week, with the Russell 2000 gaining approximately 3.9% as investor sentiment improved amid easing oil prices and renewed optimism around geopolitical de-escalation. Small caps have been one of the strongest-performing areas of the market in 2026, with the Russell 2000 up roughly 18.6% year to date. Performance has been supported by attractive valuations relative to large caps, improving earnings expectations, and growing optimism that moderating inflation could eventually create a more favorable backdrop for smaller, rate-sensitive companies.
Key Takeaway
When the Federal Reserve meets this week, investors should widely expect interest rates to remain unchanged. Despite concerns that renewed inflation pressures from surging energy prices could prompt the Fed to consider additional rate hikes later this year, recent economic data continues to send mixed signals. While headline inflation rose 4.2% year-over-year, its highest level since early 2023, much of the increase has been driven by higher energy prices following the ongoing conflict in the Middle East. Excluding energy, however, core CPI came in at 2.9% year-over-year, slightly below economists’ expectations. Overall, the data points to a disconnect between rising headline inflation and more moderate underlying inflation trends. If energy prices decline, it would reinforce the case that inflation may be nearing a peak as the current energy-driven pressures begin to subside. The Fed has continued to signal that it is in no rush to adjust interest rates, and last week’s CPI report further supports maintaining that cautious stance in the near term.
The Week Ahead: June 8 – 12
- Monday: Industrial production, Housing market index
- Tuesday: Housing starts, Import & export prices
- Wednesday: FOMC interest rate decision, Retail sales, Pending home sales
- Thursday: Initial jobless claims
- Friday: U.S. financial markets closed for Juneteenth holiday
Until next week,
Weller Financial Group
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