Weekly Market Commentary June 29, 2026
Week in Review
The week’s data reinforced a backdrop of steady but uneven economic growth, though several areas continue to show signs of moderation under tighter financial conditions.
Preliminary June Purchasing Managers’ Index (PMI) data pointed to stronger-than-expected business activity. Manufacturing PMI improved to 55.7 from the prior reading of 55.1, exceeding expectations and signaling continued strength in the industrial side of the economy. Services PMI came in at 51.3, slightly above expectations, reflecting modest expansion. Overall growth remains intact based on this data, though stronger manufacturing activity alongside slower services growth highlights an uneven expansion.
Housing data showed renewed softness. New home sales for May declined to 580,000 from 626,000 in April and fell well short of expectations. The decline reflects ongoing affordability challenges tied to elevated mortgage rates and reinforces that housing remains a pocket of weakness within the U.S. economy.
Inflation data continued to show gradual progress. Core Personal Consumption Expenditures (PCE) for May rose 0.3% month-over-month, in line with expectations, while the year-over-year inflation rate held at 3.4%. This indicates that underlying price pressures remain elevated relative to the Fed’s 2% target, and progress toward price stability continues at a gradual pace. Inflation also appears to be stabilizing rather than accelerating, reinforcing a higher-for-longer policy outlook.
Durable goods orders declined by 4.5% in May following a strong prior month, a smaller drop than expected. The pullback was driven largely by volatility in transportation orders, particularly aircraft. However, underlying trends were more constructive, with orders excluding transportation and core capital goods both increasing. This suggests that business investment remains stable despite variability in the headline figure.
Labor market data remained a source of strength. Initial jobless claims came in at 215,000, below expectations and consistent with a labor market that remains healthy. Layoffs continue to be limited, supporting the view that employment conditions are stable even as hiring momentum shows signs of slowing.
Overall, the latest data present a mixed view of the economy. Activity remains supported in several areas, though the pace of growth appears uneven across sectors. Labor market conditions continue to show stability, while housing and some measures of business investment reflect more sensitivity to current conditions. In aggregate, the data highlights an economic backdrop that remains intact but lacks uniform strength heading into the second half of the year.
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