July 10th, 2026
Economic data releases from the last two weeks have been mixed and market volatility picked up, primarily driven by renewed military strikes in the Middle East as the ceasefire ended and the conflict entered its fifth month. Notably, West Texas Intermediate (WTI) oil prices have fallen to $71 per barrel, a decline from over $90 per barrel in June. The US employment report for June showed some softening in the labor market, with 57,000 jobs added versus consensus expectations calling for 113,000, and downward revisions of -74,000 for the prior two months. The three-month moving average, however, is 111,000, which is still indicative of a healthy labor market. Professional and business services saw gains with 36,000 jobs, while the healthcare and social assistance fields also continued to show strength. The June jobs report was dragged lower by a large downdraft in leisure and hospitality, which shed 61,000 positions. The unemployment rate edged lower to 4.2% due to a drop in the size of the labor force from an increase in retirements and lower immigration. The participation rate fell from 61.8% to 61.5%, the lowest level since 2021. In stark contrast, the Job Openings and Labor Turnover Survey (JOLTS) remained elevated at 7.594 million vacancies in May, many of them stemming from leisure and hospitality industry demand from the World Cup.
Meanwhile, the Institute for Supply Management (ISM) Services Index softened to 54.0 in June from 54.5 in the prior month, remaining above 50 in expansion territory. The ISM Manufacturing Index decelerated to 53.3, but was still fueled by AI and defense industry spending. The Conference Board Consumer Confidence was also little changed at 91.2 as of mid-June, a slight improvement from a downwardly revised 90.6 in May. Lower gas prices resulting from the US-Iran temporary ceasefire agreement offset participant concerns about the labor market.
The S&P Cotality Case Shiller Home Price Index rose by 1.1% year-over-year for April, led by a 6.1% increase in Chicago and a 4.0% gain in New York. San Diego home prices rose 0.8%, San Francisco valuations edged higher by 0.6%, while Los Angeles housing prices fell -1.6%. Existing Home Sales declined -2.4% in the month of June to 4.1 million units annualized, a drop of -2.8% on a year-over-year basis. Affordability challenges continue to weigh on the housing market as prices remain relatively high and 30-year fixed rate mortgages are averaging around 6.5%, according to Freddie Mac.
US Treasury rates have increased along with oil prices over the last week. The 2-year US Treasury yield is currently 4.20%, the 5-year Treasury is trading at 4.30%, and the 10-year Treasury is up to 4.56%. Although the federal funds futures market is pricing in at least one quarter point rate hike this year, the Chandler team expects the Federal Reserve to remain on hold for the remainder of 2026.
Next Week: Federal Budget Balance, Consumer Price Index (CPI), Empire Manufacturing, Producer Price Index (PPI), Advance Retail Sales, Housing Starts, Industrial Production, University of Michigan Sentiment Index
Written by Genny Lynkiewicz, CFA, Senior Portfolio Manager