EB Daily Market Report - Wednesday, June 24, 2026

Tom Bowley - June 24, 2026

Executive Summary

Futures were slightly higher overnight and our major indices gapped up at the opening bell
After some early morning weakness, the sellers have taken over
The NASDAQ 100 ($NDX, -0.88%) is lagging as semiconductors ($DJUSSC, -1.49%) fall ahead of the big Micron Technology (MU, -3.29%) earnings report
Sectors are mixed with 6 sectors higher and 5 sectors lower
Energy (XLE, -2.02%) is notably weak as crude oil ($WTIC, -4.34%) continues its descent to $70 per barrel
Technology (XLK, -1.26%) is also weak, given the selling in the DJUSSC; software ($DJUSSW, -1.32%) is falling further as well
A very strong consumer discretionary sector (XLY, +1.39%) is helping to offset other area's losses, with travel & tourism ($DJUSTT, +6.54%) leading the way
Home construction ($DJUSHB, +6.13%) is staging a big rally as the 10-year treasury yield ($TNX) falls to 4.40%, its lowest close since early May
Airlines ($DJUSAR, +4.18%) are up despite an overall weak transports group ($TRAN, -0.46%)
Now we await the MU earnings report, due out after today's closing bell

Market Outlook

Micron Technology (MU) is down for the second straight day ahead of its latest quarterly earnings report. It's testing its rising 20-day EMA, a moving average that hasn't been lost throughout this 3-month explosion to the upside, a period where investors have seen MU more than triple prior to this 2-day, pre-earnings selling episode:

I'm expecting an excellent quarterly report from MU, one that more than likely leads to a gap higher in the morning. This is strictly an educated guess, so anyone holding MU into its earnings report is taking a BIG risk. I simply love stocks that show so much relative strength into their quarterly reports.

If MU does gap higher in the morning, it'll be very interesting to see if more buyers remain. There are negative divergences on MU, SOXX, SMH, $DJUSSC, and many of the high-flying semiconductor stocks like Sandisk Corp (SNDK), Advanced Micro Devices (AMD), Arm Holdings (ARM), etc. A gap up and failure could be further evidence of slowing momentum and upcoming 50-day SMA tests could be in store for the group.

Should semiconductors continue to stumble, that could set things up beautifully for other value-oriented areas of the market, or other aggressive areas that haven't really been participating - like the communication services sector (XLC). I mention this, because the XLC just hit significant price support of its own:

Sectors/Industries

If ever there was one day that helped to explain how the stock market looks ahead rather than behind, it would be today's action in homebuilding stocks. New home sales were reported this morning for May and they were abysmal. New home sales came in more than 8% below expectations, yet the homebuilders ETF (XHB) surged more than 5% - easily one of the best-performing industries today:

This is the same chart I showed in yesterday's DMR. I highlighted the recent improvement in the group and pointed out key short-term price resistance (two red arrows). And on a day when new home sales came in well below expectations, the group exploded through resistance.

But why? Why would homebuilders soar on awful new home sales? The answer? The prospects of lower interest rates ahead. Crude oil ($WTIC, -4.22%) was trading near $70 per barrel a few moments ago and it had dropped below $70 per barrel earlier. Lower crude oil means less inflationary pressures. Shrinking inflationary pressures means buying of bonds and falling yields. The 10-year treasury yield ($TNX) tumbled 9 basis points today to close at 4.40%, the lowest daily close since early May:

Don't be surprised if the TNX continues moving lower over the next several months as the market once again begins to anticipate lower inflationary expectations and a rate cut by the Fed.

ChartLists and Trading Strategies

I do like to see some of the consumer discretionary stocks breaking out today. I mentioned homebuilders above, but here's an example of a cruise liner showing renewed strength.

RCL:

When a stock that's been consolidating or downtrending finally breaks out, I look for two things. First, I want key price and/or moving average support to hold on the first pullback. In the case of RCL, the initial pullback was to the 20-day EMA, where buyers returned in force. Then today, RCL broke out again from its recent price high. That 1-2 punch, holding support, then breaking out again, gives me much more confidence that a new uptrend could now be underway. RCL's relative strength vs. its peers is an added bonus.

Upcoming Earnings

Our Upcoming Earnings ChartLists and Upcoming Earnings Relative Strength ChartList will not be provided in the weeks ahead until Q2 earnings season begins in mid July.

Economic Reports

May new home sales: 580,000 (actual) vs. 632,000 (estimate)

Happy trading!

Tom