HOTLINE
Hotline Archive
June 26, 2026
This is John Bonnanzio with a Fidelity Monitor & Insight Hotline update for Friday evening, June 26.
There are no model portfolio trades advised.
Stocks lost ground this week as investors grew increasingly worried about the impact of memory demand that is growing much faster than supply.
While blowout earnings from chipmaker Micron alleviated concerns that memory producers are overvalued, it wasn’t enough to ignite investor optimism. Moreover, Apple’s announcement that it would be raising prices on its various products (owing to higher memory costs) was a reminder that the ramp-up of data-center capacity is straining other areas of the tech sector. (On Tuesday, Korean chip makers were under selling pressure for regulatory reasons, which may have contributed to concerns in the U.S.)
But the week wasn’t without good news. There was broadening interest in other sectors, where valuations are far more reasonable and earnings growth is still forecast to be in double digits. From a market-cap perspective, that way of thinking has been fueling small-cap stocks this year, and to a lesser extent, mid-caps, too.
Related to tech, SpaceX shares continued to decline as it announced its first-ever bond sale, with demand for shares coming into balance with supply ahead of its inclusion in the Nasdaq 100 index, where it will be weighted at around 0.5% (its existing weight in the Nasdaq Composite is about 0.2%). The company is not yet a part of the S&P 500 (and won’t be for at least a year), though it has roughly a 0.15% weight in the Total Market Index. The space delivery company’s post-IPO trend may have had another effect: Open AI appears to be delaying its own IPO until next year.
For the week through Friday’s close, the Dow Industrials managed a gain of 0.6%, but the broader S&P 500 sank 1.9%. Worse still was the tech-rich Nasdaq Composite, which slumped 4.6% (it’s down over 6% this month). While some tech selling appears to be due to rotation into other sectors, it may also be that money market assets are on the rise.
Elsewhere, the small-cap Russell 2000 gained 1.0% this week, which was matched by the Russell Midcap index.
Political change and lower oil prices may have benefited U.K. share prices – though not by much: the FTSE 100 rose 1.0%. At the same time, however, French share prices weighed down the Stoxx Europe 100, which cooled 0.2% as the continent itself suffered under record-high summer temperatures.
In Asia, a reduced appetite for tech generally, and chipmakers in particular, contributed to Japan’s Nikkei 225 sliding 2.4%, while China’s Shanghai Composite declined 1.6%.
As for bright spots, some of that came in the form of lower crude prices. The U.S.-Iran peace accord is still opaque, but the relative lack of hostilities is being reflected in the global oil markets. In the U.S., a barrel of West Texas Intermediate crude plunged nearly 10% this week to $70.24. At that price or lower, inflation will almost certainly ease, as the fixed-income markets are inferring.
Speaking of which, the yield on the benchmark 10-year Treasury fell 8 basis points this week to 4.38%. (Bond prices move inversely to their yields.)
| Our model performance as of Friday's close is listed below: | ||
|---|---|---|
| Week | YTD | |
| S&P 500 | - 1.9% | + 8.1% |
| Barclays US Aggregate Bond | + 0.5% | + 1.1% |
| Income Model | - 0.4% | + 4.0% |
| G&I Model | - 0.9% | + 7.9% |
| Growth Model | - 2.4% | + 12.1% |
| Select System | - 1.9% | + 15.5% |
| Unique Opportunities Model | - 3.1% | + 10.3% |
Some housekeeping:
The July issue will be posted on our website Wednesday evening July 1, but may not be mailed until the following Monday due to the holiday weekend, resulting in deliveries that occur later in the month than usual.
Our next regularly scheduled Hotline update is Thursday evening July 2. (Markets will be closed next Friday in observance of July Fourth.)
Fidelity Monitor & Insight's Hotline is updated on Friday evenings or whenever the Dow moves 1,000 points or more in either direction.