Can the Stock Market Continue Higher Without Tech?

*Analyzing the markets with Richie Naso, a Wall Street veteran of over 40 years and former member of the NYSE.

Market Close 26th June, 2026.

HYG — Junk Bond Watch

HYG turned in a solid week, reflecting continued confidence in the corporate credit market. High-yield bonds benefited from stable Treasury yields, relatively tight credit spreads, and investors’ willingness to take on additional risk in search of income. HYG closed Friday at $79.83, with a 30-day SEC yield of approximately 6.5%.

Why it matters for stocks:

• When HYG is strong, it suggests investors are comfortable taking risk and credit markets remain supportive of equities.
• When HYG weakens, it often signals growing concern about economic growth, rising default risk, tighter financial conditions, or declining liquidity.

Broader Market Conditions

Market Breadth Improved

One of the week’s healthiest developments was broader participation. Earlier in the year, gains were concentrated in a handful of mega-cap technology companies. This week, financials, industrials, consumer discretionary, and small-cap stocks all contributed to the advance.

Interest Rates Stabilized

Treasury yields remained relatively contained, helping support higher equity valuations. Stable yields also benefited housing-related stocks, regional banks, and small-cap companies.

Credit Markets Remain Healthy

High-yield corporate bonds, as reflected by HYG, continued to trade well. Tight credit spreads indicate institutional investors remain comfortable taking on credit risk — an important sign that financial conditions remain favorable.

Areas of Weakness

• Utilities, consumer staples, and other defensive sectors generally lagged as investors favored higher-growth opportunities.

Ed Yardeni, president of Yardeni Research, described the stock market as looking “very solid” from an earnings standpoint, pointing to what he calls FEMO — fabulous earnings momentum — as the driving force behind his bullish outlook.

In an interview with CNBC, Yardeni noted he recently felt he had not been bullish enough on earnings given the strength of corporate performance.

Despite his optimism, Yardeni acknowledged that markets are experiencing what he describes as a “June swoon” in certain sectors, attributing the temporary pullback to “AI fatigue” as investors grow weary of trying to determine how artificial intelligence investments will ultimately pay off. Concerns about Chinese competitors releasing cheaper, open-source AI models have added to the uncertainty.

When asked about criticism that hyperscalers are being reckless with their massive capital expenditure on data centers, Yardeni pushed back.

“These hyperscalers have been very, very well managed, very savvy about their businesses. Company management has indicated they wish they had all that capacity available now because it would be completely utilized.” — Ed Yardeni, Yardeni Research — CNBC

Yardeni introduced a framework for understanding the long-term value of these investments, arguing that data has become a “fourth factor of production” alongside land, labor, and capital.

“We’re never going to run out of data. The more data we can process, the faster we can do it, the cheaper we can do it, the more data we’re going to process.” — Ed Yardeni, Yardeni Research

Looking ahead, Yardeni expressed confidence that data centers and technology infrastructure will continue to drive economic growth despite periodic bouts of AI fatigue. These are his personal views and are not a guarantee of future market performance.

Tech Took a Header. The Rest of the Market Marched On.

The booming stock market returns of the past decade have come with a nagging worry: what if the tech stocks that dominate the S&P 500 fell hard? This past week, investors got to watch that anxiety play out in real time. And as it turned out, it wasn’t all that bad.

The Dow Jones Industrial Average finished the week up approximately 1% and the S&P 500 was down roughly 1.8%, even as the Roundhill Magnificent Seven ETF dropped about 6% — its worst showing in over a year — and the Nasdaq Composite fell approximately 4%.

The tech giants have broken away from the rest of the market as the artificial intelligence buildout grows worrisomely expensive. So many microchips are being diverted to AI data centers that there aren’t enough left for consumer devices, and it is starting to affect the price of tech products. Apple hiked prices on computers and iPads by hundreds of dollars, saying it can no longer absorb the cost increases. Its stock fell approximately 6%, its largest single-day decline in more than a year. Shares of other tech giants also came under pressure.

What is notable is that the rest of the market held up well. The S&P 500 equal-weighted index, which gives each stock the same weighting and removes tech’s heavy influence, was up approximately 1.7% for the week — outperforming the cap-weighted S&P 500 by 3.5 percentage points, the largest such gap since 2020 and the second-largest in 20 years, according to Dow Jones Market Data.

“This suggests investors are rotating their money into sectors beyond tech, a potentially healthy development. Old-fashioned U.S. industrials like Deere and Caterpillar have had good weeks, along with transportation names that investors track for signs of the economy’s health.” — Joe Mazzola, Head Trading and Derivatives Strategist, Charles Schwab

“We’re not in a broad-based selloff when you have banks breaking out and you have biotech breaking out. To us, it’s a rotational correction that’s long overdue.” — Mary Ann Bartels, Chief Investment Strategist, Sanctuary Wealth

Bartels suggested tech stocks could face further near-term weakness, with chip stocks potentially seeing additional selling pressure. However, she noted this should not deter investors from the broader market, describing the current environment as a rotation rather than a broad-based decline. These are her personal views and are not a guarantee of future market performance.

Even Apple’s price increases may not be an unambiguously negative signal. Bartels noted that if consumers absorb the higher prices, it would indicate the economy remains in an inflation-supportive phase that tends to benefit corporate profits.

What I’ll Be Focused On This Week

The items below reflect Richard Naso’s personal areas of focus for the coming week and are provided for informational and educational purposes only. They do not constitute investment advice or a recommendation to trade any security.

WATCH LIST — WEEK OF JUNE 29, 2026

• Monthly Employment Report
  Key barometer of labor market health and Fed rate path expectations
• ISM Manufacturing Index
  An important read on the health of the industrial economy
• Treasury Yield Movements
  Continued stability would support valuations; a renewed move higher would pressure growth stocks

The stock market feels tightly coiled, but the question remains: which way will it break?

Beneath the surface, the picture is healthier than the headlines suggest. Market breadth has improved, Treasury yields have remained relatively steady, and credit markets continue to behave constructively. Yet the leadership that carried this rally — big technology — appears to be laboring. I also felt Friday’s action should have produced a stronger upside response. Given the amount of short covering and bottom-fishing that likely took place, the market’s inability to generate a more convincing rally leaves me somewhat cautious.

If tech can regain its footing, the broader market may have room for another leg higher. If not, the recent rotation into financials, industrials, and small caps will need to prove it can sustain the advance on its own.

For now, the market is sending mixed signals: improving participation beneath the surface, but waning momentum among its leaders. That suggests it is coiled for a meaningful move — the only question is whether buyers can seize control or whether sellers are about to reassert themselves.

– Richie

This content (“Content”) is produced by Richard Naso. The Content represents only the views and opinions of Mr. Naso, who is compensated by TradeZero for producing it. Mr. Naso’s trading experiences and accomplishments are unique, and your trading results may vary substantially from his. TradeZero does not endorse the Content and makes no representations or warranties with respect to the accuracy of the Content or information available through any referenced or linked third-party sites. The Content has been made available for informational and educational purposes only and should not be considered trading or investment advice or a recommendation as to any security.

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