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Weekly Market Commentary

The Markets

The market spent the first half of 2026 floating like a butterfly.

The market slipped every punch during the first six months of 2026, and there were a lot of them: the Iran War, gyrating oil prices, rising inflation, changed interest rate expectations, employment concerns, and mounting national debt. Each issue stepped into the ring swinging and, while the market staggered occasionally, it recovered every time.

Teresa Rivas of Barron’s reported, “Bolstered by double-digit earnings growth, 2Q was the best quarter for the S&P 500 since the second quarter of 2020, and [we saw] the best first half of a year for the index since 2021.”¹

Here are some issues investors are watching as we head into the second half of the year.

Winning on points. The United States economy had some mixed data rounds, but it appears to be solid. “Higher energy prices, stubborn inflation and widening inequality all pose risks that could erode the country’s current advantage,” reported Michelle Fleury of BBC. “Even so, compared with many other advanced economies, the U.S. continues to look robust. Its combination of flexible markets, rapid investment, abundant energy, and tolerance for risk has helped it weather shocks that have strained its peers.”²

AI prospects. Artificial-intelligence stocks have a shiny record, but will they prove out? Enthusiasm for AI and strong earnings lifted stocks to new highs, but the industry has been rocked by uncertainty. One issue is cost. The LLM Token Expenditure Index measures token price and usage. It doubled from December to May and is now down 20 percent from its May high, according to Jan-Patrick Barnert and Michael Msika as reported by Charles Riley of Bloomberg.³

The move can be interpreted in different ways. “One explanation for the recent decline is that AI companies are losing pricing power with increasingly cost-sensitive customers, and that expectations for an eventual AI bonanza could prove misplaced,” according to Barnert and Msika. “Another read is that total spend has roughly doubled since last year and cheaper tokens have expanded the market. This means that an index pause is simply digestion, while demand is real and [capital expenditure] is money well spent.”³

A hostile crowd. An additional issue for AI companies is opposition to data center expansion. Over the first three months of 2026, more than 75 data-center projects valued at $130 billion were blocked or delayed because of grassroots protests. Many Americans dislike the energy demands, and environmental impacts of the enormous installations. “Public pushback is becoming a risk factor for AI companies and their shares,” reported Joe Light of Barron’s.⁴

Fresh legs in the ring. A market rotation has begun. As June came to a close, technology stocks fell out of favor, and investors began to find value in other market sectors, including healthcare, industrials, and financials, reported Barron’s.⁵ In addition, “nervousness about AI valuations has seen investors turning away from U.S. stocks at the fastest pace since March…Investors turned to some international stocks instead, with Japanese equities seeing their biggest inflows in seven weeks…,” according to sources cited by Andre Janse Van Vuuren of Bloomberg.⁶

Last week, major U.S. stock indexes rose,⁷ and yields on mid- and longer-term U.S. Treasuries moved higher.⁸

Data as of 7/2/26	1-Week	YTD	1-Year	3-Year	5-Year	10-Year
Standard & Poor’s 500 Index	1.8%	9.3%	20.2%	18.9%	11.5%	13.5%
Dow Jones Global ex-U.S. Index	2.1	12.9	25.0	16.1	6.0	7.2
10-year Treasury Note (yield only)	4.5	N/A	4.3	3.9	1.4	1.4
S&P GSCI Gold Index	0.7	-5.0	22.8	28.8	18.3	11.8
Bloomberg Commodity Index	0.1	12.2	18.7	6.7	5.3	3.5

S&P 500, Dow Jones Global ex-US, S&P GSCI Gold Index, Bloomberg Commodity Index returns exclude reinvested dividends. The three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance; MarketWatch; djindexes.com; U.S. Treasury.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

WHAT DO YOU KNOW ABOUT ROUTE 66? The United States turns 250 this year. It’s a remarkable milestone and one worth celebrating. Since the history of the United States is broad and varied, we focused this quiz on one iconic American highway: Route 66. The Economist described it like this:

“Though it began as a motley stitching of state and local roads…it quickly became the main route west, passing through eight states. Farmhands used it to flee the Dust Bowl; so did workers, many of them African-Americans from Texas and Oklahoma, who flocked to California’s booming industrial base after the second world war; merry holidaymakers traveled along it to Los Angeles…Services for drivers flourished, including [gas] stations, diners and motels, as did the small towns through which the route passed.”⁹

See what you know about the “Mother Road” by taking this brief quiz.

Few highways capture the American imagination as Route 66 does. If you traveled all 2,400 miles, from one end of the highway to the other, what cities would you start and end in?⁹
- A. New York City and San Francisco
- B. Chicago and Santa Monica
- C. St. Louis and San Jose
- D. Detroit and Las Vegas
In 1928, runners traveled the length of Route 66 as part of a coast-to-coast marathon. “…The grueling event was organized as a promotional stunt by sports agent C.C. ‘Cash and Carry’ Pyle. Of the 199 men who began the 84-day race, 55 finished it,” wrote Elizabeth Nix of History.com. The official race name was the Trans-America Foot Race. What did the press nickname it?^10,11
- A. The Cash and Carry Classic
- B. The Blister Bowl
- C. The Footsore Follies
- D. The Bunion Derby
In its heyday, Route 66 was known as “America’s Main Street.” The all-weather highway traveled the 35^th parallel, minimizing exposure to ice and snow in winter and blistering heat in summer.¹² What led to the highway’s demise?
- A. Rising prices during the 1970s oil crisis.
- B. The interstate highway system bypassed it.
- C. A series of earthquakes destroyed key segments.
- D. The rise of commercial air travel.
A Marine Corps veteran wrote the song “(Get Your Kicks on) Route 66”. Over time it was sung by Nat King Cole, Bing Crosby, The Rolling Stones and other recording artists. What was the songwriter’s name?¹¹
- A. Bobby Troup
- B. Woodie Guthrie
- C. Chuck Berry
- D. Allee Willis

Route 66 turns 100 this year, a noteworthy celebration that aligns with America’s 250th birthday. The iconic highway paved the way for modern Americans to answer Horace Greeley’s historic call to “Go West and grow up with the country”.¹³ And they did.

WEEKLY FOCUS – THINK ABOUT IT

“The social, and especially the political institutions of the United States, have, for the whole of the current century, been the subject in Europe, not merely of curious speculation, but of the deepest interest. We have been regarded as engaged in trying a great experiment, involving not merely the future fate and welfare of this Western continent, but the hopes and prospects of the whole human race. Is it possible for a Government to be permanently maintained without privileged classes, without a standing army, and without either hereditary or self-appointed rulers? Is the democratic principle of equal rights, general suffrage, and government by a majority, capable of being carried into practical operation, and that, too, over a large extent of country?”¹⁴

– The New York Daily News, 1860

Answers: 1) b; 2) d; 3) b; 4) a

* These views are those of Carson Coaching, not the presenting Representative, the Representative’s Broker/Dealer, or Registered Investment Advisor, and should not be construed as investment advice.

* This newsletter was prepared by Carson Coaching. Carson Coaching is not affiliated with the named firm or broker/dealer.

* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.

* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.

* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.

* All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client’s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index.

* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.

* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.

* Gold represents the 3:00 p.m. (London time) gold price as reported by the London Bullion Market Association and is expressed in U.S. Dollars per fine troy ounce. The source for gold data is Federal Reserve Bank of St. Louis (FRED), https://fred.stlouisfed.org/series/GOLDPMGBD228NLBM.

* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.

* The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal.

* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.

* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.

* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.

* The risk of loss in trading commodities and futures can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. The high degree of leverage is often obtainable in commodity trading and can work against you as well as for you. The use of leverage can lead to large losses as well as gains.

* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

* Past performance does not guarantee future results. Investing involves risk, including loss of principal.

* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.

* There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

* Asset allocation does not ensure a profit or protect against a loss. * Consult your financial professional before making any investment decision.

Sources:

1 https://www.barrons.com/articles/stocks-today-ai-rotates-sectors-health-care-industrials-financials-28819289 or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/07-06-26-Barrons-Review-and-Preview%20-%201.pdf

2 https://www.bbc.com/news/articles/cwy031el03po

3 https://www.bloomberg.com/news/newsletters/2026-07-03/investors-track-tokens-for-clues-on-ai-trade-s-next-move or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/07-06-26-Bloomberg-Investors-Track-Tokens%20-%203.pdf

4 https://www.barrons.com/articles/ai-data-centers-backlash-stocks-8d564b5f or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/07-06-26-Barrons-Amerians-Hate-AI-Data-Centers%20-%204.pdf

5 https://www.barrons.com/articles/stock-market-rotation-things-to-know-today-f366b0b4 or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/07-06-26-Barrons-This-Market-Rotation-From-Tech%20-%205.pdf

6 https://www.bloomberg.com/news/articles/2026-07-02/stock-market-today-dow-s-p-live-updates?srnd=phx-markets or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/07-06-26-Bloomberg-European-Stocks-Rally%20-%206.pdf

7 https://www.barrons.com/market-data?mod=BOL_TOPNAV or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/07-06-26-Barrons-DJIA-S&P-Nasdaq%20-%207.pdf

8 https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve&field_tdr_date_value=2026

9 https://www.economist.com/culture/2026/07/02/route-66-how-a-century-old-highway-helps-explain-america or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/07-06-26-Economist-Route-66-%209.pdf

10 https://en.wikipedia.org/wiki/Trans-American_Footrace

11 https://www.history.com/articles/8-things-you-may-not-know-about-route-66

12 https://www.history.com/articles/route-66-rise-decline-highway-system

13 https://en.wikipedia.org/wiki/Go_West,_young_man

14 https://www.historians.org/sixteen-months/the-american-experiment/

Posted on July 7, 2026

Weekly Market Commentary

The Markets

Lowering inflation may prove to be a challenge.

Last week, inflation was on the minds of investors after one of the Federal Reserve (Fed)’s favorite inflation gauges showed inflation at a three-year high. Both headline and core inflation were well above the Fed’s two percent target.¹

Personal Consumption Expenditures (PCE) Index	May 2026 Price Increase¹ (year over year)
Headline inflation	+ 4.1 percent
Core inflation (excludes volatile food and energy prices)	+3.4 percent

This was the third consecutive month of accelerating price increases, reported Megan Leonhardt of Barron’s. Prices have been rising, in part, due to the energy shock created by the Iran conflict, but inflation is not just an energy story, anymore.^2,3 Other factors are creating price pressures, including:

Inflation expectations are changing. When consumers believe that prices will keep rising, they ask for higher wages and spend sooner, pushing prices higher still. The Fed likes to keep expectations anchored with its 2 percent inflation goal. Right now, that anchor is less secure than the Fed would like. Americans who participated in the most recent University of Michigan Consumer Sentiment survey expect inflation to average 4.6 percent over the next year.^4,5

AI is making devices more expensive. The AI build-out requires a lot of advanced memory chips, the same chips inside your phone, laptop, and car. Demand has been outpacing supply, pressuring prices. Last week two major tech companies raised prices on consumer electronics and software. Industry leaders warn chip shortages could persist beyond 2028, reported Don Forbes of Dow Jones Newswires.⁶

Tariffs effects are rippling through. Import taxes don’t hit prices immediately. The effects are realized over months as inventories turn over and companies reset prices. Ron Mau and Tucker Smith of the Dallas Fed found that core inflation in March 2026 (3.2 percent) would have been lower (2.3 percent) if there were no tariffs.^7,8

Another complication in the Fed’s inflation fight is the national debt, which stands at about $39.3 trillion. This year, the annual interest payment on the debt is expected to exceed $1 trillion.Some economists are concerned that deficit-driven spending will make it more difficult for the Fed to fight inflation because higher rates will increase the interest owed, reported Maria Eloisa Capurro of Bloomberg.^9,10,11

Last week, the Dow Jones Industrial Average eked out a gain, while the Standard & Poor’s 500 and Nasdaq Composite Indexes fell.¹² Yields on U.S. Treasuries generally moved lower over the week.¹³

Data as of 6/26/26	1-Week	YTD	1-Year	3-Year	5-Year	10-Year
Standard & Poor’s 500 Index	-2.0%	7.4%	19.8%	19.3%	11.4%	13.9%
Dow Jones Global ex-U.S. Index	-2.3	10.6	23.5	15.8	5.4	7.6
10-year Treasury Note (yield only)	4.4	N/A	4.3	3.7	1.5	1.5
S&P GSCI Gold Index	-3.5	-5.6	22.4	28.4	18.1	12.0
Bloomberg Commodity Index	-3.1	12.1	19.9	6.7	5.7	3.6

S&P 500, Dow Jones Global ex-US, S&P GSCI Gold Index, Bloomberg Commodity Index returns exclude reinvested dividends. The three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance; MarketWatch; djindexes.com; U.S. Treasury.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

WILL ARTIFICIAL INTELLIGENCE (AI) MAKE US MORE PRODUCTIVE? There is a broad belief that AI will deliver a productivity boom, reinvigorating economic growth in countries around the world, but the path to productivity remains uncertain.

While AI is unquestionably changing the way many people work, not everyone uses it in the same way. Jue Wang, Anne Hoecker, Ann Bosche, Tamara Lewis, and Peter Bowen of Bain & Company wrote, “A small percentage of people at every level have had the visceral ‘this is it moment’…The rest (i.e., most) are still at ‘I tried Copilot a few months ago; it didn’t work well.’”¹⁴

There are many different theories about where AI will lead us. Here are some possibilities:

AI increases productivity. According to a 2026 Deloitte report tracking the adoption and impact of AI in companies, two-thirds of participating organizations reported productivity and efficiency gains.¹⁵ Deloitte’s U.S. head of AI Jim Rowan stated, “The organizations succeeding with AI aren’t just investing in automation and algorithms, they’re investing in their people. As AI continues to spark new ways of working, this dual focus – advancing both the capabilities of their talent and AI tools – empowers teams to embrace reimagined business models and sets the foundation for competitive advantage.”¹⁶

AI increases costs. AI subscription and token costs have been increasing. (Tokens are units of data that determine how much companies pay for AI compute power.) “[AI] Agents consume significant tokens on multistep reasoning, error correction, and context loading, which add up fast on complex workflows…Net-net: The models get less expensive per token, the usage gets heavier per task, and the bill stays stubbornly high,” reported Bain.¹⁷

AI increases efficiency. Tracy Alloway of Bloomberg recently wrote about the Bank of Korea’s study exploring the effect of AI on productivity and output. Korea’s central bank discovered a productivity disconnect. AI reduced the time required to accomplish tasks, but the extra time was not used to do more high-value work. The technology improved efficiency but not productivity.¹⁸

AI increases administrative work. There is also the possibility that AI will increase administrative burdens rather than relieve them, according to Alloway. “In the U.S., for instance, you hear stories now of insurance companies using AI to reject claims. At the same time, there are startups dedicated to using AI to fight back against insurance claim rejections…You can imagine a future where AI doesn’t lead to productivity gains but instead generates an endless stream of bots interacting with bots.”¹⁸ Whether AI delivers productivity gains will depend on how the technology develops and how organizations deploy it.