Market snapshot: tech boom, new data and UK politics dictate mood
It'll be up to UK investors to decide the mood here given Wall Street is shut for a public holiday. ii's head of markets has the latest.
19th June 2026 08:26
by Richard Hunter from interactive investor
US markets ended a shortened week on the front foot, erasing the losses of the previous day when comments from the new Federal Reserve Chair revealed a hawkish tone.
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It became clear from those comments that in terms of the Fed’s dual mandate of jobs and inflation, the latter was by far the most important focus for the central bank. In addition, it became clear that an increasing number of the committee are coming round to the likelihood of an interest rate hike before the end of the year which, all things being equal, would be damaging to equities and growth in general given higher borrowing costs.
Even so, investors on reflection seemed to come to the conclusion that these comments at least gave some clarity. Despite going into a long weekend, with markets closed today for the Juneteenth Day holiday, there was no shortage of buyers content to open positions over the break.
Gains were notable and widespread, with the smaller cap Russell 2000 and growth proxy Nasdaq topping the rally, and further relief coming as the Strait of Hormuz was seeing something of a return to normality with some tankers passing through.
The mood also improved after the release of a better-than-expected jobs reading for May and an upbeat set of retail sales figures which confirmed that the consumer – a vital cog in US economic growth – was alive and well despite the overhang of the Middle East conflict. This follows on from a stellar set of earnings from US companies and equally high hopes for a half-year reporting season which will begin next month.
The announcement of a partnership between Intel Corp (NASDAQ:INTC) and Apple Inc (NASDAQ:AAPL) to design chips sent shares of the former almost 11% higher, while heavyweight NVIDIA Corp (NASDAQ:NVDA) added 3%. Micron Technology Inc (NASDAQ:MU) spiked 9% to take its gains to a staggering 260% in the year to date. The broadly based buying lifted the iShares Semiconductor ETF by more than 6% as companies increasingly jostle to be among the winners in the new world through extraordinary amounts of capital spending.
The main indices added strongly to their gains in the year to date as a result, whereby the Dow Jones is now ahead by 7.3%, while the more growth-oriented S&P500 and Nasdaq have added 9.6% and 14.1% respectively.
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In the UK, investors are digesting confirmation that Andy Burnham has won the Makerfield by-election. The Greater Manchester Mayor becomes an MP again after taking 54.8% of the vote, setting up a possible challenge to Prime Minister Keir Starmer. Political instability could overshadow equity markets while the situation plays out.
An upbeat retail sales release Friday failed to lift the mood. In a rare piece of positive news for the economy, volumes were 3.2% higher than the previous year, compared to estimates of 1.9%, as good weather and retailer promotions encouraged consumers to spend despite the headwinds arising from the Middle East. With promotional activity likely to continue over the summer and with the possibility of extra spending associated with the World Cup, some momentum could be established.
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However, some of the sheen was lost as a separate report showed a negative reading for consumer confidence, while the government borrowing figure for May was £5.6 billion higher than expected, adding further confusion to the UK economic story.
As a result, the more domestically focused FTSE250 limped to a weak open, reducing its gains in the year to date to 3.6% while the premier index fared little better. A broker downgrade weighed heavily on the Admiral Group (LSE:ADM) share price, while some weakness in the gold price drove most mining stocks marginally lower. Some strength in the defence stocks and oil majors limited the overall losses, leaving the FTSE100 ahead by 4.5% in the year so far but recently constrained by the weight of investment being diverted elsewhere.
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