Please see below the daily update article from Brooks Macdonald, received this morning – 26/06/2026
What has happened?
A broadly supportive backdrop of softer inflation data and slightly more dovish Fed pricing helped equities, even as weakness in large-cap tech weighed on headline indices. The S&P 500 (-0.01%) edged into a 4th consecutive decline, dragged lower by a sharp fall in the Mag-7 (-2.54%), with Apple down -6.12% after announcing price increases. Beneath the surface, performance was stronger. The equal-weighted S&P 500 (+0.67%) and Russell 2000 (+0.71%) both advanced. Semiconductors also outperformed, with Micron surging +15.7% after strong results. In Europe, reduced expectations for further ECB tightening supported markets, pushing the STOXX 600 (+0.80%) to a record high alongside gains across major indices.
Softer inflation eases rate pressure
US PCE inflation for May came in slightly softer than expected, offering some relief to markets. Headline PCE rose +0.4% month-on-month (vs. +0.5% expected), while core PCE printed at +0.3%. This helped to modestly ease rate expectations, with markets pricing around 34bps of tightening by December. While Fed officials continue to stress that inflation remains elevated, rates markets responded at the margin, with the 2-year Treasury yield falling to 4.12%, while the 10-year was little changed. Other data reinforced the picture of economic resilience, with jobless claims falling to 215k and Q1 GDP revised up to +2.1%.
What does Brooks Macdonald think?
Weakness in mega-cap tech has masked resilience elsewhere, with broader equities continuing to perform well. At the same time, softer inflation is giving markets confidence that central banks may not need to tighten much further, even as policymakers remain cautious. This keeps rate expectations finely balanced and markets sensitive to incoming data.
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Alexander James Roberts
26/06/2026