Some of the major trends to monitor in markets this week include new employment data in the United States and a potential roadblock to peace agreements between the United States and Iran. There will also be several economic data reports released this week that will focus on specific sectors in the US economy, as well as economic conditions in the European Union and Japan.
1. New Employment Data
The U.S. BLS will release new labor market data this week, a move that will likely strongly impact equity market sentiment and subsequent discourse from the Federal Reserve.
We have previously covered stronger employment data in previous months, while touching on the risks of ongoing layoffs in industries like technology. The previous Jobs Report in May showed strong growth in multiple sectors and raised concerns over the need for rate hikes.1
The current market consensus is that employment growth will be slightly slower in June relative to May.2
These upcoming reports, coupled with new inflation data, should guide the Fed’s assessment of whether it will need to hike interest rates in subsequent quarters.
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2. Ceasefire Developments Face New Challenges
Recent ceasefire agreements between the United States have helped to support market sentiment in recent weeks. However, geopolitical tensions escalated over the weekend after the market closed, which could have a strong impact on market sentiment this week.
Iranian drones recently attacked Bahrain after the United States carried out retaliatory strikes on Iran.3 This development is crucial to monitor, as recent peace developments have supported the market in recent weeks. Any negative developments could harm equity market sentiment in the short term.
Energy equities are worth monitoring next week. The Vanguard Energy Index Fund ETF (VDE) has fallen by nearly 10% amid declining geopolitical tensions. However, energy has been a strong-performing sector this year, and is worth monitoring in the short term.
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3. Tech Stocks
Tech stocks were one of the worst-performing sectors last week. Investors should keep a close eye on tech stocks, particularly semiconductor stocks, as this sector may be very volatile this week.
Exchange-traded funds that track the S&P 500 are heavily exposed to tech stocks. The top 10 S&P 500 constituents are all tech and AI companies and account for 37% of the index.4
One key event to watch in markets this week is the Federal Reserve’s additional comments on Wednesday, which could impact technology stocks. These comments will follow the release of labor market data and could provide more insight into the Federal Reserve’s stance on future rate hikes.
Tech stocks could be worth monitoring, following their strong sell-off last week, especially since there may be new geopolitical tensions in markets this week.
4. US and International Growth Data
One of the main concerns in the market has been a potential slowdown in global growth following tensions in the Strait of Hormuz. Conditions in the United States look a bit more favorable, following recent revisions to Q1 2026 GDP growth data.5
There will be many important pieces of economic growth data released in the markets this week. In the United States, there will be new data released about construction spending, manufacturing PMI, consumer confidence, and other labor market data.
The BOJ will also release new inflation and growth data next week, providing more context on the impact of geopolitical tensions. Japan’s quarterly Tankan Business Survey will provide more insight into Japan’s manufacturing activity and economic health. Japan has entered a period of slower growth, with current projections calling for 0.5% growth in FY 2026.6 Recent inflationary pressure has also pushed the BOJ to hike rates to record levels in 2026.
The European Union will release new CPI data this week, which should provide more data about the impact of conflicts in the Middle East. Last month’s release showed 3.2% inflation rate in the Euro area, driven by a circa 10% increase in energy prices and lower moves in other categories.7
5. Real Estate and Data Center REITs
Real estate stocks performed exceptionally well last week amid the broader sell-off in the S&P 500 and tech stocks. This sector is worth monitoring this week, as there will be new data on construction activity and home prices this week.
Another particularly intriguing area to monitor is data center spending, which has risen to record highs in 2026.8
Data center REITs like Digital Realty Trust (DLR) and Equinix ( EQIX) have trounced the S&P 500 this year. Companies like these are worth following as we potentially head into a volatile turn in markets this week.
