The Profit Margin: June 29, 2026
Statistic of the Week
Using the popular 50/30/20 budgeting rule, (allocating 50% of income to needs, 30% to wants, and 20% to savings), a recent study examined America’s 100 largest cities to determine the income required for a family to live comfortably. The San Francisco Bay Area ranked as the most expensive region, with a family of four needing an annual income of approximately $407,597 to meet that standard. At the other end of the spectrum, Texas offered some of the most affordable major metropolitan areas, with a family in San Antonio needing an estimated $192,608 for the same standard.
Global Perspective
The South Korean stock market, which is heavily influenced by several global semiconductor and memory chip manufacturers, has experienced significant volatility as investors assess the long-term impact of artificial intelligence on corporate earnings. Last week, the KOSPI fell 10% in a single trading session on exceptionally heavy volume. Market volatility has been so pronounced that exchange circuit breakers have been triggered four times this year.
Market Moving Events
Tuesday: Consumer Confidence, JOLTS
Wednesday: ADP Employment, Construction Spending
Thursday: Jobless Claims, ISM Manufacturing, Factory Orders
Friday: U.S. Markets and VWM Office Closed
Commentary
In a relatively light week for economic data, the major domestic equity indices delivered mixed results. The DJIA was the standout performer, advancing 0.60%.1 The S&P 500 declined 1.95%,2 while weakness in the Nasdaq was the week’s dominant story. The technology-heavy index fell 4.60%, marking its fifth consecutive daily decline.3 Through Friday’s close, the Nasdaq was down 6.2% for June and on pace for its worst monthly performance since March 2025.4 Investors continue to grapple with the implications of the massive investments being made in artificial intelligence and whether those expenditures will ultimately generate sufficient earnings growth. Additionally, the diversion of semiconductor production toward AI-related data center demand has contributed to shortages in chips used for consumer products, putting upward pressure on prices.5 The volatility surrounding the AI buildout is not confined to U.S. markets. For additional perspective on this theme, please see this week’s “Global Perspective.”
Last week’s release of the PCE Inflation Index (chart below) showed inflation continuing to accelerate in May. There is some hope that a de-escalation of the conflict with Iran could push oil prices lower and ultimately help cool consumer inflation. Through Friday’s close, both West Texas Intermediate and Brent crude were down nearly 20% month-to-date.6 Oil prices moved higher over the weekend after Iran attacked a commercial transport vessel and the United States responded. In this week’s shortened trading schedule, Thursday’s employment report and comments from Fed Chair Kevin Warsh at the ECB Forum are likely to be the primary market-moving events.
Chart of the Week
The PCE Price Index, the Federal Reserve’s primary inflation gauge, showed headline inflation running at 4.1% and core inflation at an annual rate of 3.4%. The headline figure is the highest since April 2023, while the core reading is the highest since October 2023. The readings were mostly in line with analyst estimates.
Source Materials
Market Moving Events:
MarketWatch.com
Chart of the Week: Clearnomics,
Federal Reserve
Statistic of the Week:
SmartAsset.com
Global Perspective:
The Economist
Commentary:
1. Bloomberg
2. Bloomberg
3. Bloomberg, Investor’s Business Daily
4. MarketWatch.com
5. Barron’s
6. MarketWatch.com