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Tech Is Leading Again, but the Cleanest Setups Are Few
Last week, the market looked positive on the surface, but there were also some reasons to be careful.
US stocks rose during the shorter holiday week, led by technology and chip companies. Still, the latest Stock Power Rankings show that a good week for the market does not mean every quality growth stock is a clear buy.
The long-term outlook is still positive, but in the short term, investors need to be more selective.
Weekly Market Insights
The S&P 500 was up 0.93% for the week, the Nasdaq gained 2.43%, and the Dow rose 0.71%. Technology stocks led the way, and consumer discretionary stocks also improved. However, software and services fell behind after a major consulting firm gave weaker guidance, reminding investors that AI investments still need to turn into real profits.
The Federal Reserve also encouraged caution by keeping interest rates at 3.50%-3.75%. They pointed out that inflation remains above their target and that energy supply issues continue to push prices up.
The Fed’s June projections now expect the policy rate to be 3.8% by year-end, up from 3.4% in March. They also raised their 2026 inflation forecast to 3.6% from 2.7%. This does not mean the market is about to crash, but it does mean that high-growth tech stocks may have a tougher time justifying their prices.
Looking ahead, investors will focus on new business activity data and, more importantly, the May Personal Income and Outlays report on Thursday, June 25. This report includes the Fed’s preferred PCE inflation measure, as well as the latest GDP revision and corporate profit numbers.
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