There is hope the tech rally that has powered stocks higher for much of the year will breathe new life into a holiday-shortened week and the end of one of the most bullish quarters in Wall Street history. That’s even in the face of corrections for virtually every name in the Magnificent Seven cohort over the past month.

Tit-for-tat attacks in the Gulf region between the U.S. and Iran over the weekend, which threatened nascent peace talks, were halted late Sunday so talks based on the June 17 peace agreement could continue.

That small dose of optimism looks set to mitigate uncertainty regarding the artificial intelligence investment wave—about the cost increases it is likely to elicit, and the ongoing surge in inflation that is expected to shift the Federal Reserve into rate-hiking mode before the end of the year. 

Global stocks aren’t nearly as buoyant, however, with Japan’s Nikkei 225 edging higher to close up 0.15% to start the week. South Korea’s KOSPI, a proxy for Asian appetite for the chip trade, slipped to end Monday’s session 0.2% lower, dragging its one-month decline to around 1%.

That leaves investors wondering whether the current level of U.S. exceptionalism, both in terms of the impact of the war in Iran, a hawkish central bank, and a market that’s worryingly overreliant on the tech sector, will continue through the back half of the year. 

Wall Street’s biggest banks still see solid, but slowing, gains for the S&P 500 over the next six months, while investors are quietly rotating into healthcare, industrials, and financials to offset the risks of a fading tech rally. 

Those trends are likely to define a more cautious market over the summer months.

—Martin Baccardax

Barron’s Live: Dr. Ed Yardeni, president of Yardeni Research, speaks with Barron’s Editor in Chief Ben Levisohn and Senior Managing Editor Lauren R. Rublin today at noon about his economic and market outlook, the sectors he favors, and his early read on Kevin Warsh’s leadership of the Fed. Sign up here.

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The economy has an inflation problem, and the Federal Reserve has three tools to fight it. This problem was brought home again last week with the news that the personal consumption expenditures price index accelerated to 4.1% annually in May. Inflation is expected to moderate but remain above target.

• That puts the Fed in a tough spot, especially as its new chairman, Kevin Warsh, has vowed to deliver price stability. The Fed can influence economic conditions in three ways: by adjusting the target rate range, making changes to its balance sheet, and communicating expectations.

• Warsh has been adamant about reducing Fed communications, and has promised a thorough review encompassing speeches, news conferences, the so-called dot plot of inflation forecasts, and even policy meeting transcripts and minutes. But “Fedspeak” may be the central bank’s most useful tool at the moment.

• The Warsh Fed may say less, about less, than the Fed under former Chair Jerome Powell, but Warsh has already delivered a strong message that markets heard. His unadorned declaration that the Fed will meet its inflation target has already had an impact on forward-looking inflation expectations.

• The Fed kept its 2% target. That hawkish stance has had a dramatic impact, says Brian Griggs, head of the portfolio strategy group at Nuveen. One-year inflation expectations were already falling with lower energy prices, but they continued to plummet after that, now their lowest of the year.

What’s Next: The Fed may need to do more than talk, given price growth has run above 2% for more than five years and inflationary pressures continue to build. But rate hikes could inflict more economic pain, particularly on less-well-off households, and on businesses, which may cut jobs as interest costs rise.

—Megan Leonhardt

Qualcomm is looking to accelerate CEO Cristiano Amon’s long term strategy to diversify the chip maker away from its core market, smartphones. Its deal five years ago to buy Nuvia put it closer to its goal of making smartphone chips only one-third of its sales by 2029.

• The company’s highly regarded chips now run numerous consumer goods besides smartphones, like the expansive Mercedes-Benz CLA infotainment screens, Meta Platforms smartglasses, and Dell laptops. Non-smartphone chips made up 28% of Qualcomm’s total chip revenue last fiscal year.

• Now it’s trying to speed up the project yet again with acquisitions. This time the target isn’t consumer devices, but hundreds of billions of dollars in artificial-intelligence data center capital expenditures. Tunning AI models, a process known as “inference,” is starting to become the bigger workload.

• Now Qualcomm is jumping into this crowded pool, and in a relatively short period, the chip maker has put together an AI data center tech stack that looks a little like Nvidia’s. We will see these products begin to roll out in Qualcomm’s fiscal 2027, building over the following two years.

• Eventually, Qualcomm will have a high speed inference chip, the HBC platform. Qualcomm will also release a CPU, or central processing unit, with Meta as the first data center customer. And through acquisition, Qualcomm has networking chips, which are already for sale, with two custom chip customers signed on.

What’s Next: Qualcomm has also announced the acquisition of Modular, which brings software for AI inference and programming. The deal also includes the startup’s co-founder and CEO, Chris Lattner, a legendary figure in software circles.

—Adam Levine

The Trump administration has gone all-in on nuclear energy, committing to lend $17.5 billion to companies that build new reactors. But the utilities that own and operate reactors don’t appear to have much interest in building new ones, and investors are too worried about the high cost and long construction delays.

Duke Energy, which operates more nuclear reactors than any other regulated utility, has no current plans to build more, CFO Brian Savoy said last week, telling a Reuters summit that the risks of launching a new nuclear project outweigh the benefits.

• North Carolina-based Duke, which operates in six states, has 11 gigawatts of nuclear capacity, enough to power at least 10 million homes. Duke is extending the permits for those reactors so they can operate for 80 years. Otherwise it’s focused on building other generation sources such as natural gas.

Entergy, a utility that operates four nuclear plants, has made similarly cautious comments about building new reactors. It hasn’t applied for loans for the Energy Department, a spokesman said, and would need to have “a customer partnering with us to help cover the construction costs,” to move forward.

• For the industry, recent attempts to build plants have come in over budget and behind schedule, with the latest plant expansion in Georgia costing more than $15 billion above expectations. Customers were on the hook for much of those overruns, and they weren’t good for investors either.

What’s Next: Utilities will have to buy in if nuclear is going to get off the ground. It isn’t that they don’t like the tech. Nuclear energy is carbon-free and much more reliable than other kinds of electricity-generation, running at nearly full capacity year-round. And with electricity demand rising, policymakers see nuclear as a good option.

—Avi Salzman

Conagra Brands, behind grocery aisle staples like Reddi-wip topping, Marie Callender’s frozen meals, and Vlasic pickles, has a new CEO who, according to one analyst, has been given a clean slate to evaluate investment spending, broad portfolio change, and even a potential dividend cut to stabilize the business.

• Former J.M. Smucker executive John Brase succeeded Sean Connolly as CEO this month. Conagra has struggled with inflation, changing consumer behavior, and a large load of debt, and investors expect slashing the payout to be one of Brase’s early moves.

• TD Securities analyst Robert Moskow recently met with Brase and wrote in a note that investors probably would feel better if they cut the dividend right away when they provide fourth quarter earnings on July 15 rather than wait for further evaluation.

• The stock has a 10% dividend yield right now, the highest dividend yield in the S&P 500. Its price has tumbled more than 50% over the past three years. The company should be able to continue funding its dividend if it chooses to allocate its cash that way. 

• Its dividend payout ratio, the share of quarterly profit that goes toward a dividend, was 58% over the past year, well below the typical danger zone of 80% to 90%. Conagra generates about $840 million in annual free cash flow, while paying out $670 million to shareholders.

What’s Next: Conagra was already shifting. It offloaded the Chef Boyardee brand in June 2025 for $600 million and sold the frozen seafood brands Van de Kamp’s and Mrs. Paul’s for $55 million. High protein frozen foods like edamame and Marie Callender’s Chicken Parmigiana Bowl are seen as potential growth areas.

—Ian Salisbury

—Newsletter edited by Liz Moyer, Patrick O’Donnell, Rupert Steiner