2Q 2026 Commentary: Halftime

Summary

• U.S. large-cap stocks ended the quarter up 15%, and small-cap stocks gained 22%. U.S. intermediate-term bonds had modest gains, ending the quarter up 0.7%.
• The U.S. economy remained resilient as strong job growth, steady consumer spending, larger tax refunds, and improving lower-income household finances offset higher inflation.
• The U.S.–Iran conflict disrupted energy markets, pushing oil prices above $110 per barrel and gasoline prices sharply higher before conditions stabilized late in the quarter.
• The Federal Reserve entered a new era under Kevin Warsh, launching a review of its inflation framework, communications strategy, balance sheet policy, and the role of AI-driven productivity.
• AI remains a dominant market theme, but investor focus shifted from AI spending to AI returns, contributing to broader market leadership beyond mega-cap technology.

Read and download the commentary here.