Stock Market Outlook Hinges On AI Earnings And Fed Rate Risks
Stock Market Outlook Hinges On AI Earnings And Fed Rate Risks
Publish Date: 2026-06-28 08:53:00
Source Domain: www.forbes.com
The second-half stock market outlook depends on whether AI earnings strength can offset inflation, Federal Reserve rate risks, oil uncertainty, and elevated valuations.
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As the clock ticks toward the middle of the calendar year, another bout of jitters in the artificial intelligence (AI) and technology sectors hit the stock market last week.
Market Reaction
As would be expected in a tech-focused sell-off, the Magnificent 7 underperformed last week. The Magnificent 7 includes Microsoft (MSFT), Apple (AAPL), NVIDIA (NVDA), Tesla (TSLA), Alphabet (GOOGL), Meta Platforms (META), and Amazon (AMZN). The 1.6% gain in the average stock price shows that the stock swoon was not very broad; it was centered on tech and AI-related companies.
Market Returns
Glenview Trust, Bloomberg
The profit-taking in the tech and AI-related sectors should be kept in proper perspective; the iShares Future AI and Tech ETF (ARTY) remains over 50% higher year-to-date, even after declining 10.4% from its peak. Despite robust earnings accompanied by an improved outlook from Micron Technology (MU), the semiconductor sector was a primary target of the sell-off. Given its torrid rise, the semiconductor sector is still up over 37.8% year-to-date, even after last week’s decline. Thanks to its improved earnings guidance, Micron Technology (MU) only declined fractionally last week and is up over 296% year-to-date. Notably, the software sector, which is down over 21% year-to-date due to fears of AI’s negative impact, held up quite well during the tech wreck last week.
Chip Wreck
Glenview Trust, Bloomberg
Other Assets
Some other assets that some claim are non-correlated with stocks offered no shelter from the storm. Gold (-3.4%), silver (-10.5%), and Bitcoin (-5%) all declined more than stocks last week. It has been a challenging year for all 3 assets after a stellar 2025 for silver and gold. Year-to-date, the 3 are all lower: gold (-5.6%), silver (-17.3%), and Bitcoin (-31.8%).
Bitcoin, Silver & Gold
Glenview…
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