Market Review: July 06, 2026

Closing Recap

Monday, July 06, 2026

U.S. stock markets finished higher as the tech trade was back after weakness late last week, a sign traders are brushing off the AI worries that have jolted stocks in recent weeks, as it was mostly tech and industrials riding the AI wave that kept major averages higher. Tech (XLK) rose over 2% and Industrials (XLI) +0.7%, while Staples (XLP), REITs (XLRE), Healthcare (XLV) and Utilities (XLU) were all down around 1%. July has been a strong month historically, closing in the “red” just once in the last 14 years and with earnings around the corner next week, investors remains on the tech bandwagon. That optimism will face a test tomorrow, when chip giant Samsung is expected to share a second-quarter update. On Wednesday, the Fed will release minutes from its first meeting under Chairman Kevin Warsh, which traders will parse for clues on the trajectory of interest rates. Still, since the hawkish Fed meeting 2 weeks ago, stocks have largely pushed higher with no concerns yet on Wall Street as the VIX index remains depressed. Overall, it was a quiet day with a few economic data points, no earnings and no Fed speakers. Stat of the day: @RyanDetrick noted on X, “41 other times the S&P 500 gained more than 10% in a quarter. The next quarter was higher 85% of the time. The next two quarters were higher 85% of the time. The next year was up a median of 13.4%. Momentum is real.”

• S&P Global Services PMI Jun F reported at 51.2 (vs. est 51.3; prev 51.3) and the S&P Composite PMI was 51.9 (vs. est 52.2; prev 52.2).

• The U.S. dollar declined vs the British Pound for an 8^th straight day but rallied again vs. the euro and Japanese yen as the dollar index (DXY) was little changed at 100.87. The June jobs report last Friday indicated softer employment growth, causing markets to scale back bets on a Federal Reserve interest rate increase this month. The recent decline in oil prices has also reduced pressure. The dollar remains up about 2.75% for the year to date.

• Airlines at Raymond James as DAL downgraded to Outperform from Strong Buy as remains viewed favorably due to its structural advantages, refocused third-party MRO business, strong balance sheet, and balanced capital allocation, including a recent 15% dividend increase alongside deleveraging, though a recent share price rally has reduced near-term valuation upside. Also, JBLU downgraded from Market Perform saying although sees limited upside in both JBLU and ULCC following the recent rally, Jetblue shares are further constrained by ~$6.12 conversion price of its convertible debt.

• In Drones: ONDS to acquire DZYNE Technologies in $875.8M cash-and-stock transaction as DZYNE shareholders will receive $200 million in cash and approximately $675 million in Ondas stock, with more than half of the stock consideration subject to a six-month lock-up.
• In Chemicals: HON’s spinoff SOLS to acquire ESI in a $14.5B cash-stock deal, including debt. ESI holders get $10 cash + 0.5 SOLS/share, a ~15% premium, and will own ~44% of the combined company.

• In Insurance: ALL & CB were downgraded at HSBC to Hold from Buy; LNC was upgraded to Overweight at Barclays as sees the company nearing the end of its capital-building process and may soon be able to redeploy capital through share repurchase. UNM announces $3.8 bln long-term care reinsurance deal with Fortitude Re; In other research, Morgan Stanley downgraded BRO to Underweight (from EW) and SLDE to Equal Weight (from OW) saying they see more compelling risk/ reward elsewhere in the insurance space.
• In REITs: CXW completed the sale of its 2,560-bed California City Detention Facility in California City, California and its 1,994-bed Otay Mesa Detention Center in San Diego, California to the U.S. and its assigns, by and through the Department of Homeland Security for an aggregate gross sales price of $1.5B.

• CANF achieves key pivotal phase 3 psoriasis milestone with completion of patient enrolment for the interim analysis; data expected Q4’26/Q1’27.
• NVS said it agreed to pay up to $1.5 billion for Myricx Bio, in a bid to bolster its portfolio amid industry competition for oncology drugs; Novartis will pay $1.1 billion upfront, with up to $400 million in potential additional payments.
• PHVS said the FDA accepts NDA for Deucrictibant IR for on-demand treatment of hereditary angioedema attacks.
• PRCT was downgraded to Hold from Buy at Truist on lowered confidence in the company’s procedure growth Re-accel. prospects (key to the multiple in its view) & it reduced ’26-27E revenue.
• REGN said that it expects a $127M acquired IPR&D charge in Q2, slashing GAAP and non-GAAP diluted EPS by ~$1.00; tied to upfront and opt-in payments on collab/licensing deals. 

• Memory stocks rebound (MU, SNDK, WDC) on Ai optimism after analysts called the recent pullback a buying opportunity. UBS said it expects the dram market to remain undersupplied until at least 2028, while Citi and Bank of America raised forecasts on stronger Ai demand. At Citi, MU added as upside catalyst, and QCOM adding downside catalyst in semis and semi Equipment preview. Citi views the recent pullback in the group as healthy and like AMD, TXN and AMAT as its top Buy-rated picks into earnings. Also, MU breaks ground on expansion of factory in Japan to produce advanced memory chips. Nikkei reported Kioxia began shipping its latest memory chips and says AI-related demand is becoming extremely strong
• Other semi news: AVGO and AAPL expanded their long-standing technology partnership through 2031. AVGO will develop and supply a range of custom ASIC silicon products for multiple generations of Apple products under new multi-year agreements.

• Data center/Neoclouds: Data center provider CSquare is seeking to raise up to $1.35 billion through an IPO. WULF shares surged after Anthropic signs lease for TeraWulf data center in Kentucky as the data center will have capacity of around 400 megawatts with first power delivery expected in the second half of 2027. The lease is initially expected to generate around $19 billion in revenue. IREN shares outperformed along with HUT, CIFR, RIOT and other HPC, infrastructure names after tumbling last week. DELL shares jumped after  President Trump said earlier today “go out and buy a Dell computer."

• Optical sector: B Riley said AAOI is vulnerable to AMZN and OpenAI’s MRC – structural headwinds for transceiver TAM. As Ai workloads migrate to inference, this architectural deflation loops directly into the broader Optical market, stripping out switch-to-switch Optical links and dismantling the legacy transceiver-to-compute multiplier. For the transceiver market, this dual-front flattening represents a severe structural headwind that will sharply decelerate the sector’s long-term TAM expansion, since these technologies reduce structural transceiver counts by 40% to 50%. Briley believes AAOI will be especially vulnerable to this development. GLW Reiterate Buy and $243 PT at Bank America in Q2 preview saying upcoming FQ2 should keep the stronger 2H setup intact, with Optical supporting REV/EPS at or above guide in FQ2.