Market View: Week of Jul. 24, 2026
ECONOMIC REVIEW¹
The Conference Board Leading Economic Index (LEI), which provides an early indication of potential turning points in the business cycle and where the economy is heading in the near term, declined by 0.2% in June after a 0.1% increase in May.
LEI is down by only 0.3% over the first half of 2026, a much slower rate of decline than the index’s 1.1% contraction over the second half of 2025.
Most components were little changed, but positive contributions from financial components were not enough to offset weak consumer expectations and slight declines across most of its other categories.
The Conference Board raised its gross domestic product (GDP) forecast from 1.8% to 1.9% year-over-year for 2026.
Although consumer spending is weakening, strong business investment related to AI is expected to support economic activity while inflation continues to improve.
New home sales in the U.S. increased 1.6% month-over-month to a seasonally adjusted annualized rate of 628,000, beating the consensus expected 607,000. Sales are down 5.6% from a year ago.
June sales rose in the South, Northeast, and Midwest, but fell in the West.
Housing supply edged down 0.2% to 485,000, bringing the number of months it would take to sell out of all existing inventory to 9.3 in June.
The median price of new homes sold was $398,300 in June, down 2.7% from a year ago.
How does the most recent economic data impact you?
Although LEI did decline in June, erasing May’s gain, the direction of travel for the index is arguably more important than individual monthly readings.
LEI’s six- and twelve-month growth rates, while negative, were stable, and as mentioned above, the financial components and continued strong business investment related to AI are expected to support economic growth.
Given the fact that the Conference Board raised its 2026 GDP forecast, the positive business environment appears to outweigh the negative consumer outlook for the time being.
The upside surprise for new home sales was yet another positive but may not be durable, as mortgage rates have risen and the ongoing Iran conflict continues to impact energy prices and inflation.
A LOOK FORWARD¹
The second Federal Reserve meeting and Federal Open Market Committee (FOMC) interest rate decision under Chair Kevin Warsh highlight a busy week of data that includes the June Personal Consumption Expenditure (PCE) Index reading, Q2 GDP, and the Employment Cost Index (ECI).
How does this week’s slate of economic data impact you?
While the PCE reading will not be released until after the Fed meeting, the two together, along with new ECI figures and Q2 GDP, should provide a much-needed update to both the inflation and growth outlooks.
MARKET UPDATE²
| Market Index Returns as of 7/24/26 | WTD | QTD | YTD | 1 YR | 3 YR | 5 YR |
|---|---|---|---|---|---|---|
| S&P 500 | -0.60% | -1.11% | 8.98% | 17.41% | 19.10% | 12.54% |
| NASDAQ | -2.13% | -4.71% | 7.80% | 19.04% | 21.70% | 11.80% |
| Dow Jones Industrial Average | -0.35% | -0.65% | 9.05% | 17.62% | 15.67% | 10.26% |
| Russell Mid-Cap | -0.03% | -0.93% | 14.22% | 16.32% | 14.82% | 8.21% |
| Russell 200 (Small Cap) | -1.08% | -3.08% | 18.79% | 31.19% | 15.79% | 7.27% |
| MSCI EAFE (International) | 0.45% | -0.06% | 9.38% | 18.50% | 15.47% | 9.00% |
| MSCI Emerging Markets | 0.48% | -5.31% | 17.27% | 31.80% | 18.96% | 6.98% |
| Bloomberg US Agg Bond | -0.74% | -1.18% | -0.57% | 2.98% | 3.75% | -0.33% |
| Bloomberg High Yield Corp. | -0.57% | -0.43% | 1.52% | 4.96% | 8.30% | 4.01% |
| Bloomberg Global Agg | -0.72% | -1.16% | -1.37% | 0.22% | 2.68% | -1.92% |
OBSERVATIONS
All major domestic averages delivered negative returns last week, but the NASDAQ led the way down as AI spending concerns drove the tech-heavy index -2.13% lower.
The S&P 500 (-0.60%) and the Dow (-0.35%) experienced less significant declines.
Mid-cap stocks held up quite well, with the Russell Mid-Cap Index falling just 3 basis points, but small cap stocks experienced more significant volatility, as the Russell 2000 pulled back -1.08%.
International equities were the only bright spot among the major indices, with developed (MSCI EAFE) and emerging markets (MSCI EM) delivering positive returns, 0.45% and 0.48%, respectively.
Fixed income indexes were solidly negative on the week as yields rose.
The Bloomberg US Aggregate Bond Index (-0.74%), US High Yield Corporates (-0.57%), and the Bloomberg Global Aggregate Bond Index (-0.72%) all pulled back meaningfully.
BY THE NUMBERS
Investor Zero in on Runaway Tech Spending, Putting Dent in AI Trade: Wall Street is reckoning with a new reality: The biggest tech companies are no longer cash-printing machines. Concerns about Alphabet’s and Tesla’s earnings results spread to other major tech stocks on Thursday, with investors dialed in to the implications of ramped-up capital spending, putting a dent in the artificial-intelligence trade. Alphabet’s shares slumped some 7%, costing the company more than $293 billion in market value, its largest one-day market-cap loss on record. Shares of Tesla tumbled 15%, the stock’s worst post-earnings performance ever. The selloff extended to other tech stocks: Meta Platforms fell 3.4%, and Oracle slid 4.6%. The Magnificent Seven erased nearly $890 billion in market value, the biggest one-day market cap decline since the tariff turmoil of April 2025. The Nasdaq composite lost 2.2% Both Alphabet and Tesla reported soaring revenue, but investors instead zeroed in on their AI spending. The phrase of the day: free cash flow—which turned negative at both³
LeBron James Picks His Next and Final Team at a Bargain-Basement Price – The 76ers: The wait for a 41-year-old from Akron, Ohio, to choose his next employer is over. In one of the final twists of his career, LeBron James picked the team that almost nobody expected when his free agency began weeks ago. The greatest player of his generation will be joining the Philadelphia 76ers as one of the greatest bargains in NBA history, signing a 2-year, $8 million contract, according to a person familiar with the terms of the deal. “This is my last decision,” James wrote on social media. “I’m not going for money”.⁴
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1 Data obtained from Bloomberg as of 7/24/26.
2 Data obtained from Morningstar as of 7/24/26.
3 Investors zero in on runaway tech spending, putting dent in AI trade
4 LeBron James picks his next and final team at a bargain-basement price: The 76ers
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