Monday’s ISM Services report gave us a good early look at how the largest part of our economy is holding up. The index surveys businesses like banks, healthcare providers, and retailers, essentially the service side of the economy, and any reading above 50 signals growth. The index came in at 54%, just a touch below May’s reading, but this marks the 24th month in a row that services businesses have reported growth. The best news buried in the report was on the jobs front. The Employment Index jumped to its highest level since 2024, with businesses citing World Cup-related hiring as one contributor. Prices paid by these businesses also eased to their lowest level since February, a small but welcome sign that some of the inflation pressure we’ve been watching may be starting to soften.
Wednesday brought the minutes from the Fed’s June meeting, the first held under new Chairman Kevin Warsh, and they confirmed what many suspected. The committee is genuinely split on where interest rates go from here. Some members argued that tariffs and energy costs still have inflation running too hot and want to keep the door open to raising rates. Others pointed to a cooling job market as reason to hold steady or even consider cuts down the road. Warsh himself has been consistent in his message since taking over, telling a global audience of central bankers in Portugal last week that “prices are too high” and that the Fed will deliver price stability regardless of outside pressure. He’s also made clear he wants the Fed to talk less and let incoming data do the talking, which means we may get fewer hints about the future than we’re used to.
Looking past this week, corporate earnings season kicks off in earnest, and expectations are unusually high. Analysts currently expect S&P 500 companies to report earnings growth of roughly 23% compared to a year ago, which would be the fastest pace since 2021. Technology and energy companies are expected to lead the way, with semiconductor businesses in particular seeing a huge jump in profits tied to ongoing AI investment. The bar has been raised significantly over the past few months, so while the growth numbers sound impressive, companies will need strong results just to meet what Wall Street is already pricing in. It sets up an interesting few weeks where good news may be met with a shrug and any disappointment could hit harder than usual.
Interesting to Note
The World Cup has taken over much of the country these past few weeks, and it’s now down to the final eight. France was the first team to punch its ticket to the semifinals, while host nations Canada, Mexico, and the U.S. have all been eliminated, a reminder that home-field advantage only goes so far in soccer’s biggest tournament. The semifinals kick off next week in Dallas and Atlanta, with the final set for July 19th at MetLife Stadium in New Jersey. Beyond the games themselves, it’s been fascinating to see the tournament’s economic footprint show up in places like this week’s ISM report, with host cities reporting a genuine bump in business activity.
Looking Ahead
Bank earnings kick off Q2 season: JPMorgan, Wells Fargo, Citigroup, and BlackRock report Tuesday, July 14th, followed by Bank of America and Morgan Stanley on Wednesday. These results will set the tone for the broader earnings season.
June CPI arrives Tuesday, July 14th, with economists watching closely for signs of whether tariff and energy-driven price pressure is easing or picking back up.
June retail sales data is out Thursday, July 16th, giving us a read on whether consumer spending is holding up as the labor market cools.
The next FOMC meeting is July 28th-29th, the second under Chairman Warsh, where we’ll get a clearer sense of which side of the committee’s debate is gaining ground.
As always, please don’t hesitate to reach out with any questions. Have a great weekend.
Written by: Chris Wasson, CFP®
Sources:
ISM Services PMI Report – June 2026
Bloomberg – Warsh on Inflation Risks
FactSet – S&P 500 Earnings Preview Q2 2026
Yahoo Sports – World Cup Schedule
The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation. Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. Mosaic Asset Partners, LLC is not affiliated with Kestra IS or Kestra AS.
