U.S. stock markets remained closed on Friday in observance of Juneteenth, solidifying Thursday's robust rally that pushed the major indices into positive territory for the week. The holiday closure left Thursday's closing levels unchanged, with the S&P 500 rising 1.1% to 7,500.58, the Nasdaq Composite surging 1.9%, and the Dow Jones Industrial Average eking out a modest 0.1% gain.
The rally was driven by continued strength in technology shares, particularly semiconductor stocks. Intel surged 10.6% on Thursday after President Donald Trump announced the company would produce chips for Apple in the U.S. Nvidia added 3%, while Micron Technology climbed 8.7%. However, SpaceX dropped 3.6%, extending its decline since its debut last week.
For the holiday-shortened week, the S&P 500 advanced 0.9%, the Dow rose 0.7%, and the Nasdaq posted a stronger gain of 2.4%. The Russell 2000 index, which tracks smaller companies, added 1.2% for the week after a 2.1% jump on Thursday.
Investor attention now turns to the upcoming week, which features critical data and earnings reports. The personal consumption expenditures (PCE) price index — the Federal Reserve's preferred inflation gauge — is due out, along with a final reading of first-quarter GDP. Additionally, Micron Technology is scheduled to report earnings on Wednesday, June 24, providing a key test for the artificial intelligence trade and data center demand.
The Federal Reserve's hawkish stance remains a central focus. The central bank held the federal funds rate steady at 3.50% to 3.75% this week, but signaled that inflation remains above its 2% target. According to Reuters, nine Fed officials expect another rate hike by the end of 2026. Krishna Guha, vice chair at Evercore ISI, noted that the market's reaction was "massively amplified" after Chair Kevin Warsh's press conference, highlighting the Fed's tough stance on price stability. Diane Swonk, chief economist at KPMG US, called the Fed's statement "a gift" to Warsh, locking in his inflation focus.
Equity funds continued to attract strong inflows. U.S. equity funds pulled in $38.37 billion in the week ended June 17, the largest weekly haul since November 2024. Tech sector funds brought in a record $21.46 billion, according to LSEG Lipper data cited by Reuters. "There's still a lot of juice in the AI trend," said Andy Pratt, director of investment strategy at Burney Company. Steve Kolano, chief investment officer at Integrated Partners, described semiconductor demand as "through the roof."
However, risks remain. A hotter-than-expected inflation print, a firmer Fed stance, or a disappointing outlook from Micron could pressure expensive growth stocks. Geopolitical tensions in the Middle East also pose a threat to oil prices, with Brent crude hovering near $80 per barrel on Friday, still down about 8% for the week. Rory Johnston at Commodity Context noted that traders have been "pricing in a deal" and smooth flow, but cautioned that is not guaranteed.
Drew Matus, chief market strategist at MetLife Investment Management, told Reuters that recent equity gains have supported consumer confidence, but investors remain alert to "the wealth effect going away" if the AI-driven rally stalls. As markets reopen on Monday, all eyes will be on inflation data and Micron's earnings to gauge the sustainability of the current rally.
