The S&P 500 Index® posted a +15.2% return for the second quarter, marking its strongest quarterly performance since Q2 2020. This second quarter strength has propelled the S&P 500 index® to a +10.2% year-to-date return despite a -4.3% performance during the first quarter.
The second quarter performance was marked by broad participation, with almost all sectors delivering positive returns. Drivers of the gains included strong corporate earnings, continued enthusiasm around artificial intelligence (AI) and reduced inflation concerns as oil prices have retreated from their conflict-related highs. U.S. Small Cap stocks (Russell 2000® Index) and Emerging Market stocks (MSCI EM) were notable outperformers, with each delivering +20% performance.
Similarly, the fixed income markets rebounded after a difficult first quarter to post better second quarter results despite ongoing inflation concerns. Municipal bonds and High Yield bonds led the way with each posting modestly positive returns of +2.5%.
We remain cautiously constructive for the balance of 2026. As you read through our quarterly commentary we note several risks remain, notably elevated valuations, AI-related uncertainty, a potential resurgence of conflict in Iran, persistently stubborn inflation and a possible future Federal Reserve rate hike. Yet, despite these risks, we expect continued earnings growth to support the equity market to provide modest returns through the remainder of this year.
For more detail, please click on this link: Q2 2026 Review & Outlook and, please click here for your individual performance report. We look forward to connecting with you soon.
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