Bespoke’s Morning Lineup – 6/26/26 – Limping into the Weekend

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“In bear markets, stocks usually open strong and close weak. In bull markets, they tend to open weak and close strong.” – William J. O’Neill

Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.  

After a strong start and intraday sell-off yesterday, futures have equities in the penalty box to start the last session of the week, so we’ll see if bulls can make a stand into the weekend. S&P 500 futures are down 0.40% while the Nasdaq looks to open down just over 1%. Treasury yields are modestly lower, while crude oil trades down more than 2.5% and barely hangs onto the $70 level. Gold prices are modestly higher, while Bitcoin looks to bounce but remains below $60K.

Asian stocks ended the week with a thud. The Nikkei was up over 1% heading into Friday’s session, but a 4.2% decline pushed that index into a 2.7% decline for the week. South Korea fell 5.8% in the session and 7.1% for the week, while onshore China stocks fell a relatively modest 2.3% and just 1.6% for the week. The main culprit for the weakness was in the technology sector, specifically memory stocks. Japanese inflation data didn’t help either as Tokyo CPI accelerated to 1.7% y/y at the headline level versus 1.4% in May,

European stocks don’t have nearly the exposure to technology that Asia and the US have, but that isn’t stopping indices in the region from falling. The STOXX 600 is down nearly 1%, putting it into negative territory for the week. Germany and the UK are leading today’s losses with declines of more than 1%, while Spain has been the region’s outperformer, falling just 0.4%. Looking on the bright side, a survey from the ECB showed consumer near-term inflation expectations falling from 3.9% down to 3.5%.

In the US today, the only economic reports on the calendar are Wholesale Inventories at 8:30, followed by Michigan sentiment at 10 AM. The Michigan report is notoriously negative, so don’t expect much optimism, although the survey of inflation expectations will be watched for signs of improvement.

It’s been a rough June for megacap tech stocks. Through yesterday’s close, all eight of the largest S&P 500 stocks are below their 50-day moving averages, and in the case of Amazon.com (AMZN), Meta (META), Microsoft (MSFT), and Tesla (TSLA), they’re also below their 200-day moving averages.

All eight stocks, which account for about 38% of the entire S&P 500, are down anywhere between 3.5% to 7.0% over the last week, and they’re all at oversold levels trading at least 5% below their 50-day moving averages. Despite these oversold levels in nearly 40% of the S&P 500, the index itself is down less than 1% over the last week and remains above its 50-day moving average.

A look at the monthly performance of S&P 500 stocks shows the concentration of weakness among the largest S&P 500 stocks. The chart is sorted by market cap, so the largest stocks are on the left side of the x-axis, and the smallest ones are on the right. Note the deep concentration of red on the left. In fact, besides the eight largest stocks, there’s no other point in the chart where eight stocks in a row have negative returns this month!

Overall, the eight largest stocks in the S&P 500 are down an average of 13.7% this month, while the next 492 are up an average of 1.8%. In June, bigger hasn’t been better.

For the Nasdaq 100, it has been a similar trend. The eight largest stocks in the Nasdaq 100, which are also the eight largest stocks in the S&P 500, are down an average of 13.7%, and all are lower this month. Among the 92 other stocks in the index, though, the average performance this month has been a 0.3% gain.

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