Tech Repricing Meets Sticky Inflation
June 29, 2026
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Risk markets are rebounding this morning, as Comcast’s plans to spin off NBCUniversal have lifted the stock by roughly 20%,1 boosting sentiment in the sector. The S&P 500 Index declined last week, as a sharp reassessment of artificial intelligence (AI)-related valuations and profit-taking drove a meaningful rotation out of technology and into more defensive sectors.2 The Dow Jones Industrial Average was a notable outlier, generating positive returns on the week.3 Oil prices continued to move lower, falling approximately 9.6% last week, while broader risk assets—including commodities and cryptocurrencies—also came under pressure.4 The key macroeconomic data came from Thursday’s May Personal Consumption Expenditures (PCE) report, where headline inflation rose to 4.1% year-over-year (highest since April 2023) and core PCE printed 3.4%.5 However, with oil prices declining since then, this may prove somewhat stale by the time of the next Federal Open Market Committee (FOMC) meeting.
From a fixed-income perspective, Treasury yields moved lower across the curve, with the 10-year declining eight basis points (bps) to 4.37% and the 2-year falling a similar amount toward 4.09%, as bonds rallied alongside the equity pullback.6 Investment-grade credit spreads remain near cycle tights, with Bloomberg U.S. Corporate Index option-adjusted spread (OAS) at 75 bps—levels that continue to reflect strong demand and benign default expectations, but offer limited buffer against volatility.7 Notably, this marks the first time investment-grade corporate spreads traded outside of the 71-74 bps range since May 13.8 The combination of easing energy-driven inflation expectations, resilient consumer activity (personal income and spending both 0.7% month over month)9 and still-elevated core inflation underscores the current macro tension: growth remains intact, but inflation has yet to move convincingly toward the Federal Reserve’s (Fed) target.
In the week ahead, the June employment report on Thursday will serve as the primary catalyst, with expectations for a moderation in job growth following May’s stronger-than-expected 172,000.10 With markets closed Friday for the July 4 holiday, liquidity will be compressed into four trading days. Kevin Warsh is scheduled to speak on Wednesday. Additional data includes Institute for Supply Management (ISM) Manufacturing and ADP employment on Wednesday, as well as consumer confidence on Tuesday.11 The labor market remains the key link between growth and inflation, and any signs of softening could reinforce the recent rally in duration. On the other hand, another firm print coupled with sticky inflation would support the Fed’s hawkish bias and potential for a rate hike later this year.
Sources:
1Yahoo! Finance – Comcast stock surges after it said it's spinning off its media businesses; 6/29/26
2,3LPL Financial – Weekly Market Performance; 6/26/26
4,6-8Bloomberg
5,9CNBC – Core inflation rate hit 3.4% in May, highest since October 2023, Fed’s preferred gauge shows; 6/25/26
10,11MarketWatch – Economic Calendar; as of June 29, 2026
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