EB Daily Market Report - Wednesday, July 1, 2026

Tom Bowley - July 01, 2026

Executive Summary

Futures were down overnight and our major indices gapped down
We saw solid recovery in most indices, especially the Dow Jones, before more afternoon selling kicked in
The NASDAQ 100 has underperformed on a relative basis as semiconductor ($DJUSSC, -3.46%) have been notably weak, extending their recent consolidation
Communication services (XLC, +2.38%) and financials (XLF, +2.22%) have been the best-performing sectors
Meanwhile, technology (XLK, -1.96%) has lagged badly
Insurance brokers ($DJUSIB, +4.33%) are among the strongest industry groups - much more on this group below
Crude oil ($WTIC, -1.69%) has retreated back to $68 per barrel
Cryptocurrencies are showing strength as bitcoin ($BTCUSD, +2.61%) moves slightly above 60000
The ADP employment report showed that jobs came in slightly below consensus estimates
The June nonfarm payrolls report is more closely watched and will be out in the morning

Market Outlook

We've seen mostly back and forth action today as we begin July, Q3, and the 2nd half of 2026. Semiconductors ($DJUSSC) are showing a lot of relative weakness, while beaten-down areas of the market show relative strength. Here's a quick summary of the relative strength winners today among industry groups:

One day doesn't make a trend, especially on a day when we're mostly trading sideway, but we'll continue to monitor sector and industry relative strength, watching for more significant rotation.

Sectors/Industries

When I looked at the industry groups showing relative strength today, I was mostly drawn to insurance brokers ($DJUSIB). First, financials are having a very strong session, and insurance brokers could be a longer-term beneficiary as a longer-term channel support line is being tested:

When I see a long-term chart nearing or testing key support, I then will move to the daily chart to see if I can spot a signal of a reversal. Here's what I found with today's strength:

This trend breakout seems to carry much more weight on the daily chart, given the test of channel support on the weekly chart. I would expect to see more strength ahead in insurance brokers - both on an absolute and relative basis.

ChartLists and Trading Strategies

If you like the insurance brokers charts that I posted above and want to take a shot on one, I like the potential head & shoulders bottom on a recent IPO, Accelerant Holdings (ARX):

Buying any stock into a reverse right shoulder is risky (because it remains in a downtrend), but can be extremely rewarding if the reverse right shoulder low does, in fact, prove to be a major bottom. This pattern would measure to 25 on a confirmed breakout above the neckline. That would be a doubling of the current price.

Upcoming Earnings

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

Economic Reports

June ADP employment report: 98,000 (actual) vs. 110,000 (estimate)

Happy trading!

Tom