Nasdaq Extends Losing Streak as Money Moves Out of AI Winners

The lead from Friday's June 26 session wasn't another broad market washout. It was the continued rotation under the surface. The Nasdaq Composite fell 0.24% to 25,297.62 for a fifth straight decline, while the S&P 500 slipped 0.05% to 7,354.02 and the Dow Jones Industrial Average lost 44.51 points, or 0.09%, to 51,876.11, according to CNBC. The weekly split was even clearer: the Nasdaq dropped 4.6% for the week, the S&P 500 fell nearly 2%, while the Dow still managed a 0.6% weekly gain, another sign traders are rotating rather than abandoning risk altogether.

That shift matters. Recent coverage has focused on the tech selloff itself. Friday's more actionable development was where the money went instead. Healthcare, consumer staples, utilities and financials outperformed as investors kept reducing exposure to the most crowded AI infrastructure names. CNBC reported the S&P 500 information technology sector fell about 1% on the day while defensive groups finished higher, extending a pattern traders will be watching into quarter,end positioning and the start of July CNBC.

Healthcare Takes the Baton as Chip Stocks Keep Sliding

The biggest single,stock story was the widening gap between cyclically defensive winners and AI,linked losers. Chip stocks stayed under pressure on Friday, with Micron down more than 6%, AMD off 2% and Intel lower by more than 3%, according to CNBC. That came even after Micron's blockbuster quarterly report earlier in the week, a sign that good earnings are no longer enough when positioning is stretched and investors are questioning the durability of AI capex.

On the other side of the tape, healthcare became the market's shelter. Eli Lilly jumped 7% on Friday, Johnson & Johnson gained nearly 4%, and AbbVie rose more than 4%, per CNBC. For traders, that's the more interesting near,term read. Leadership is broadening away from semis and mega,cap growth toward lower,volatility sectors with earnings resilience.

Apple also remained part of the inflation,and,tech,cost story after raising MacBook and iPad prices because of surging memory and storage costs tied to AI datacenter demand, according to a Reuters report carried by Global Banking & Finance Review. The move reinforced investor concerns that AI,related demand is now feeding through to hardware costs and could pressure margins or demand across consumer electronics.

Fed Tone Stays Hawkish Even as Treasury Yields Ease

Bonds offered only limited relief. The 2,year Treasury yield fell more than 3 basis points on Friday to 4.086%, while the 10,year yield slipped 2 basis points to 4.372%, according to CNBC. Real yields didn't collapse, and that's important. Stocks got a bit of support from lower oil, but not enough to reverse the broader de,risking in tech.

The policy message stayed hawkish. Minneapolis Fed President Neel Kashkari said he now expects one rate hike by year,end, not a cut, Reuters reported in coverage syndicated by MSN, while CNBC said the shift came after hotter inflation and lingering geopolitical pressures CNBC. That fits with the Fed's June 17 decision to hold rates at 3.5% to 3.75% while removing language that had pointed toward eventual cuts. The committee's updated projections implied at least one hike this year, according to CNBC.

The inflation backdrop hasn't gone away. Core PCE rose 3.4% year over year in May, the highest since October 2023, while headline PCE ran at 4.1%, CNBC reported CNBC. Put simply, traders got lower yields on Friday, but not a dovish Fed pivot.

Oil Drops Hard, Gold Firms, Geopolitics Still Hover Over the Tape

Commodities were the cleaner risk signal. U.S. WTI crude fell 3.74% on Friday to $69.23 a barrel and Brent dropped 4.34% to $71.99, according to CNBC. By Monday morning, Brent was trading around $72.42 after reopening higher from Friday's settle, based on CNBC market data. The decline followed reports that more tankers were exiting the Strait of Hormuz and that some immediate supply fears were easing, though the route remains a live geopolitical risk, according to CNBC.

That said, the market still isn't treating the Middle East as fully resolved. Reuters,linked reporting cited a U.S. official blaming Iran for an attack on a Singapore,flagged cargo ship near Hormuz, while Iraq was considering action tied to its OPEC dispute, a reminder that the geopolitical premium can come back fast CNBC. For equities, cheaper oil helped ease some inflation stress. For macro traders, it didn't erase the event risk.

Gold held its bid. Spot gold was around $4,050 an ounce on June 26, according to CNBC Select. That combination, lower oil but firm gold, suggests markets were dialing back immediate supply,shock fears without fully stepping away from hedges.

Crypto Remains Weak, Not Panicked

Crypto hasn't become the main macro story, but it's still flashing risk appetite. Bitcoin was trading around $60,000 early Monday, with CoinMarketCap showing roughly $60,359 and Yahoo Finance near $60,000, while Ethereum traded around $1,576 to $1,577 across major data providers CoinMarketCap Yahoo Finance CoinMarketCap. Those levels are well below prior highs and line up with the broader cooling in speculative growth trades.

The takeaway is that crypto is soft, but not disorderly. If Bitcoin can't reclaim levels materially above $60,000 while yields stay elevated and tech leadership narrows, traders will read that as confirmation that liquidity,sensitive assets still lack a catalyst.

Micron's Blowout Wasn't Enough. That's the Message for Earnings Season.

Micron remains the cleanest example of how hard the market is reassessing AI,linked expectations. The company reported fiscal third,quarter EPS of $25.11 on revenue of $41.46 billion, both well above consensus, according to MarketBeat. Yet the stock still sold off on Friday after an initial post,earnings surge faded.

When a major AI beneficiary beats by that margin and still can't hold the move, the signal is clear: positioning and valuation matter more than the headline beat. That raises the bar for the next wave of earnings and guidance. Traders should assume the market wants proof that AI demand remains broad, monetizable and not yet peaking.

What to Watch Today

Quarter,end and month,end flows on Monday, June 29. Defensive sectors are leading, and rebalancing could amplify that rotation.
Treasury yields after last week's hawkish Fed messaging. The key levels are roughly 4.09% on the 2,year and 4.37% on the 10,year, based on Friday's close from CNBC.
Oil and Hormuz headlines. Brent around $72 is far calmer than mid,June panic levels, but any fresh disruption could quickly revive the inflation trade CNBC.
Whether healthcare, staples and utilities keep outperforming tech. Friday's leadership shift was one of the most important tells from the session CNBC.
This week's macro calendar. There are no major U.S. releases on Monday or Tuesday, but June nonfarm payrolls are due on Thursday, July 2, one day early because U.S. markets will be closed Friday, July 3, for Independence Day observance, according to Yelza.
Earnings are light today, but the near,term calendar includes Nike and Constellation Brands on Tuesday, June 30, according to Trading Economics.