NASA’s next-generation moon rocket, the Space Launch System (SLS) rocket with the Orion crew capsule, is prepared to move to the launch pad at the Kennedy Space Center in Cape Canaveral, Florida, U.S. January 16, 2026. Launch around the moon and back is scheduled for February 6, 2026. REUTERS/Joe Skipper
Index Performance
U.S. broad-based indices inched higher into greener pastures. The Russell 2000 climbed 3.93%, followed by the Nasdaq (+0.70%), and Dow Jones Industrial Average (+0.68%). The S&P 500 Total Return Index
Broad-based fixed income indices also ended the period mixed. The FTSE U.S. Broad Investment Grade Bond Total Return Index rallied 0.52%, while the FTSE High Yield Total Return Index inched 0.35% higher. On the other end of the spectrum, the FTSE Municipal Tax-Exempt Investment Grade Bond Index declined 0.13%.
Macro Viewpoint
The U.S. economy has moved in a seesaw-like pattern since the start of the year, leaving investors cautious on direction and looking for a breather. Elevated inflation, geopolitical tensions, tariff spillovers, and mixed labor market data have kept positioning defensive as investors continue to navigate a highly uncertain backdrop.
This week’s CPI release did little to change the narrative. Headline CPI rose 0.5% in May, following a 0.6% increase in April, but remained below the year-to-date high of 0.9% recorded in March. The energy index stayed elevated at 3.9%, a bit firmer than April’s 3.8%, while food eased 0.2% from 0.5%. Core CPI (excluding food and energy) rose 0.2% for the month and ticked up to 2.9% year-over-year, both below Reuters’ estimates.
The inflation story remains largely an energy store, driven by the blockage of crude through the Strait of Hormuz. While those pressures may be starting to ease, investors should be careful not to declare victory too soon. Going into the weekend, President Trump announced that U.S. and Iranian officials have reached an agreement to reopen the strait. Oil has since tumbled 33% from its April high of $124 per barrel to $83, though prices may take a few months to stabilize and revert to normal levels.
On the Yield Front
Yields detracted amid the news. The two and five-year Treasury yields dipped 7.3bps, while the 10-year inched lower by 6.5bps. The 30-year yield slipped 5.1 bps.
Fund Flows by Asset Type
For the LSEG Lipper Fund Flows week ending June 10, 2026, markets are reaching for the skies, but investors are reaching for stability within fixed come. Money Market Funds shed $16bn, with bonds capturing the bulk of the move at roughly $12bn. Fixed income was the last man standing as every other asset class faced outflows.
Equity flows turn negative with an outflow of $7.8bn led by a $10bn outflow from U.S. Large-Cap. The gainers were no match for that drawdown, but investors are still chasing alpha elsewhere; U.S. Multi-Cap Funds attracted $3.2bn, U.S. Sector Equity gained $2.2bn, U.S. Equity Income gathered $1.3bn, while U.S. Developed Global Market Funds grew $1.2bn. Other buckets within the equity universe contributed to the net outflow for the week. U.S. Developed International and U.S. Emerging Markets lost $1.6bn, while U.S. Small Caps, and U.S Mid-Caps lost $2.2bn and $988m respectively.
Fixed income was on a roll, pulling in $12.2bn in net flows. U.S. Municipal Bonds took $637m, and U.S. Taxable Bond gathered an impressive $11.7bn. The single largest bucket was U.S. Short/Intermediate Investment Grade Debt at roughly $5bn, with U.S. Short/Intermediate Government & Treasury Funds close behind at $4.1bn. Other buckets within the Fixed Income universe contributed to the favorable inflows: U.S. Government and Treasury Fixed Income gained $676m, U.S. High Yield $593m, Alternative Bonds $314m, and World Income Funds gathered $173m. The lone detractor was EM Debt, which gave back $431m.
Commodities posted a net outflow of $2bn, driven by a decline in Precious Metal Funds. U.S. Mixed Assets Funds posted moderate outflows of $366m, with majority of the outflows coming from target-allocation funds. Alternative Funds posted outflows of $333m.
