The second quarter of 2026 marked a strong recovery with all major U.S. equity indices posting positive returns. During the quarter investor sentiment improved as conditions in the Middle East stabilized, oil prices declined, and corporate earnings continued to exceed expectations. The S&P 500 delivered a robust gain of 14.87%, the Nasdaq Composite rose 21.41%, and the Dow Jones Industrial Average ended the quarter up 12.90% closing at a record high.
The strong performance from Global Equity Markets was led by Emerging Markets. US Markets finished in second place and Developed Markets Outside the US trailed, while still posting nearly double-digit returns. Technology and semiconductor companies once again led the advances as enthusiasm surrounding artificial intelligence infrastructure spending remained a key investment theme. Market participation also broadened, with small-caps and cyclical sectors outperforming for a large part of the quarter. Falling energy prices weighed on the Energy sector but provided some relief to consumers and businesses concerned about inflationary pressures. Global Fixed income markets produced modest positive returns coupled with healthy yields as credit markets and investors alike grew increasingly optimistic that inflation could continue to moderate.
The quarter marked the ending of the Jerome Powell era at the Fed. On May 22nd Kevin Warsh was sworn in as the new Chairman of The Federal Reserve. The FOMC held two meetings during the quarter maintaining target interest rate at both. Although expectations for future rate cuts shifted throughout the quarter, resilient employment, steady consumer spending, and solid corporate earnings reinforced confidence that the U.S. economy remains on stable footing.
While uncertainty surrounding global trade, geopolitical developments, and future monetary policy persists, financial markets demonstrated notable resilience during the quarter. Investors enter the second half of 2026 encouraged by improving market breadth, moderating inflation, and continued economic expansion, though periods of volatility are subject to remain as these risks continue to evolve.
| TOT RETURN 3-MO* | TOT RETURN 12-MO* | TOT RETURN 3-YEAR* | TOT RETURN 5-YEAR* | CLOSING VALUE | |
|---|---|---|---|---|---|
| S&P 500 | 14.87% | 20.86% | 19.00% | 11.78% | 7,499.36 |
| Dow Jones Industrial Average | 12.90% | 18.65% | 14.99% | 8.68% | 52,319.20 |
| NASDAQ Composite | 21.41% | 28.69% | 23.88% | 12.57% | 26,213.72 |
Source: Morningstar. The S&P 500, Dow Jones Industrial Average, and NASDAQ Composite are unmanaged indexes. It is not possible to invest in an index. Past performance is no guarantee of future results. * Price only. Does not include dividends.
All overviews and commentary are intended to be general in nature and for current interest, educational purposes and factual reference only and are subject to change based on market and other conditions.