U.S. Markets
U.S. stocks posted strong gains during the second quarter, fueled by encouraging economic data, ongoing diplomatic efforts in the Middle East, and solid first-quarter corporate earnings.
The Standard & Poor’s 500 Index advanced 14.87%, while the Nasdaq Composite gained 21.41%. The Dow Jones Industrial Average rose 12.90%.
April Set the Tone
Stocks surged in April, posting their strongest monthly performance since 2021 as investors welcomed easing geopolitical tensions in the Middle East and renewed efforts to reopen the Strait of Hormuz. The Nasdaq’s 13-day winning streak—its longest since 1992—highlighted the market’s strong momentum.³
Large-cap technology stocks played an outsized role in the market’s performance. The S&P 500 Information Technology sector gained more than twice as much as the broader index and significantly outperformed every other sector. ⁴
A Volatile May
Stocks rallied early in May, with the major indexes reaching multiple intraday and closing records despite elevated market volatility. Investors were encouraged by falling oil prices and a stronger-than-expected jobs report, although a hotter-than-expected April inflation reading tempered some of the optimism. ⁶
Kevin Warsh was sworn in as the new Chair of the Federal Reserve late in the month, which appeared to bolster investor confidence, with all three major indexes hitting multiple record closes.7
Dow 30 in June
In contrast to April and May, the Dow Industrials led the three major averages in June as investors rotated out of tech and into old-economy names. During June, the largest-ever initial public offering and the Dow hitting 52,000 for the first time captured investors’ attention.8,9
By the end of the quarter, oil prices had fallen to their lowest levels since February. Lower energy prices helped support defensive sectors, including healthcare and financials, as investors continued rotating away from large technology companies.¹⁰
When the quarter closed, both the S&P 500 and Nasdaq had posted their strongest quarterly gains in six years, while the Dow recorded its best first-half performance in five years. The Russell 2000 Index of small-cap stocks also delivered its strongest first half in 35 years.¹⁰
The Federal Reserve
As expected, the Federal Open Market Committee (FOMC) held rates steady at its June 17 meeting, maintaining the Fed Funds target range at 3.50% to 3.75%. Despite the seemingly status quo decision, there was a lot more going on at first glance.
Most notably, this was newly appointed Chair Kevin Warsh’s first FOMC meeting. During his post-meeting press conference, Chair Warsh emphasized the Federal Reserve’s commitment to returning inflation to its 2% target. His remarks reinforced the importance of monitoring geopolitical developments in the Middle East and their potential impact on inflation.³⁶
The Federal Reserve meets four more times between now and year-end; the next FOMC meeting is July 28-29.
What Investors May Be Talking About in Q3
Looking ahead, financial markets are likely to remain focused on diplomatic developments in the Middle East and their potential impact on global energy markets.
Even though it will take time to restore oil and commerce flows through the Strait of Hormuz, investors anxiously await updates on ship traffic.
Investors will also continue to monitor inflation trends to see how changes in oil prices are rippling through the broader economy.20
Regardless, financial markets know that a return to “normal” global oil supply levels won’t happen quickly. Restarting capped wells is complex, and it may take additional time for refineries to rebuild depleted inventories.21
Have Questions? We’re Here to Help
While headlines and market movements can create uncertainty, it’s important to keep them in the context of your long-term financial goals. If you have questions about the current market environment, interest rates, or geopolitical developments—or if you’d like to discuss how these events may affect your financial plan—please don’t hesitate to reach out to your Patriot advisor. We’re here to help you stay informed, evaluate any changes that may be appropriate, and keep your financial plan aligned with your long-term objectives.
- WSJ.com, June 30, 2026
- TMX.com, June 30, 2026
- Morningstar.com, April 17, 2026
- SSGA.com, April 30, 2026
- WSJ.com, May 8, 2026
- WSJ.com, May 12, 2026
- WSJ.com, May 22, 2026
- CNBC.com, June 12, 2026
- CNBC.com, June 16, 2026
- CNBC.com, June 30, 2026
- SSGA.com, July 1, 2026
- Reuters.com, April 17, 2026
- TradingEconomics.com, June 30, 2026
- TMX.com, April 30, 2026
- TradingEconomics.com, May 15, 2026
- YahooFinance, May 29, 2026
- TMX.com, May 29, 2026
- TheGlobeandMail.com, June 30, 2026
- TMX.com, June 30, 2026
- BostonFed.org, June 4, 2026
- SeekingAlpha.com, June 15, 2026
- MSCI.com, June 30, 2026
- BEA.gov, June 25, 2026
- WSJ.com, June 5, 2026
- WSJ.com, June 17, 2026
- TradingEconomics.com, June 17, 2026
- KPMG.com, June 15, 2026
- National Association of Home Builders, June 16, 2026
- TradingEconomics.com, June 16, 2026
- WSJ.com, June 9, 2026
- TradingEconomics.com, June 9, 2026
- WSJ.com, June 24, 2026
- TradingEconomics.com, June 24, 2026
- WSJ.com, June 10, 2026
- KPMG.com, June 25, 2026
- WSJ.com, June 17, 2026
- NAR.realtor, April 13, 2026
- NAR.realtor, April 13, 2026
- NAR.realtor, April 13, 2026
- NAR.realtor, November 14, 2025
- NAR.realtor, November 14, 2025
- REIC.ca, January 6, 2026
- NAHB, February 17, 2027
- DailyHive.com via CREA, January 24, 2026
- DailyHive.com via CREA, January 24, 2026
- CMHC Spring 2026 Housing Supply Report, March 11, 2026
- NAR.realtor, January 14, 2026
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