2nd Quarter 2026 Key Takeaways

MARKET RESILIENCE DESPITE HEADLINES

Despite turmoil in the Middle East. Despite higher oil prices throughout much of the quarter.(1) Despite persistent inflation. Despite all of this and more, the U.S. stock market, as defined by the S&P 500, posted a solid, positive return during the second quarter of 2026.(2)

SPACEX LIFTED OFF

Look up in the sky! It’s a bird! It’s a plane! It’s Space Exploration Technology Corporation’s (SpaceX) Initial Public Offering (IPO)! In one of the more ballyhooed IPOs in recent memory (if not ever), SpaceX “went public” during the second quarter of 2026. Judging by the market’s reaction, investor demand appeared exceptionally strong following the IPO,, as the company’s market capitalization soared above the $1 trillion mark by the end of June (3).

INTEREST RATE SHIFTS: FROM CUTS TO HIKES

Thanks to some pesky inflation data throughout the quarter, market expectations shifted significantly, with Fed Funds futures implying a greater probability of a rate hike than a rate cut by year end.(4) In fact, according to CME Group’s FedWatch Tool, expectations for an additional Fed rate hike exceeded expectations for a rate cut (5)

HOCKEY MET THE SOUTHERN HEAT

On June 14, 2026, the Carolina Hurricanes won the NHL’s Stanley Cup Final. This led at least one person to question the absurdity of a team from Raleigh, North Carolina, winning the Stanley Cup in the middle of June when the high temperature reached 101 degrees Fahrenheit outside the rink. Go figure. (6).

GOLD LOSES SOME OF ITS LUSTER

After a near meteoric rise in January and February, the price of gold came back down to Earth during the second quarter. As the U.S. dollar strengthened amid expectations of higher-for-longer interest rates from Federal Reserve, the shine came off the shiny stuff.(7) Even so, according to many observers and recent purchasing trends, central banks’ have continued to show interest in gold. (8)

BRITAIN’S REVOLVING DOOR CONTINUES

In what seems to be an increasingly common occurrence, the prime minister of the United Kingdom (PM) resigned on June 22, 2026. The next PM will be the sixth in seven years. That sort of ministerial leapfrog is making Britain’s political landscape seem unusually unpredictable, even by its own standards. (9)

PUBLIC SKEPTICISM REMAINED

After having a full quarter to assess the situation, polling from RealClearPolitics.com continued to show that more Americans disapproved than approved of the military action against Iran.(10) While public opinion remained divided, financial markets largely focused on the conflict’s potential impact on economic growth, inflation and energy prices.

P/E VALUATIONS REMAINED ELEVATED

According to Bloomberg Financial, the trailing 12-month Price/Earnings ratio (P/E) on the S&P 500 was 27.08 on June 26,2026. While that is nowhere near the 10-year daily high of 33.31 reached on May 5, 2026, it is still significantly higher than the 10-year median of 21.26.(11) In other words, the U.S. stock market, by this measure and using this index, appears to be trading above its 10-year median valuation.

SPORTS, SPORTS, AND MORE SPORTS

June 2026 was great for sports fans. The New York Knicks won their first NBA title in 53-years. (12) The NHL awarded the Stanley Cup to a team from North Carolina. Baseball hit its summer stride. Wyndham Clark won the US Open. The WNBA continued to draw solid numbers. The Wimbledon Championships got underway, and the World Cup opened in the Americas to sold-out stadiums.(13) There seemed to be a little something for everyone.

AI CONTINUED TO RESHAPE EXPECTATIONS

Artificial Intelligence (AI) continued to be a major topic of discussion. If people weren’t talking about major AI companies going ‘public,’ they were protesting associated  data centers or wondering whether all the hype about AI eliminating jobs was valid. (14) Regardless of the topic, many might agree AI has the potential to fundamentally change how people live and conduct business.

A TALE OF TWO ECONOMIES

During the second quarter of 2026, the Bureau of Economic Analysis (BEA) reported the U.S. economy grew at a 2.1% rate during the first quarter of the year. (15) According to Bloomberg Financial, and just about every other news source, the S&P 500 comfortably rose over 10% for the second quarter through June 26, 2026. The BLS estimated the official unemployment rate was a miserly 4.3%.(16) Despite all of this seemingly good news, ‘composite consumer confidence for the United States, as tracked by the Federal Reserve, remained historically low.(17) Hmm. There appears to be a disconnect in there somewhere.

PRIVATE CREDIT FACED THE PRESSURE

Nearly everyone has buyer’s remorse at some point. It could be for a car, clothes, a piece of furniture or even a private credit fund. Throughout the second quarter, there were numerous reports of these private funds limiting customer withdrawals. (18) While there doesn’t appear to be one definitive reason why investors want their money back, it presents a challenge for a sector that has seen enormous growth and has been a major source of credit/liquidity for many companies. (19)

Sources:

1. The New York Times – Oil Prices Return to Prewar Levels, Three Months Later. June 26, 2026.
2. S&P Global – S&P 500. Accessed July 1, 2026.
3. Reuters – SpaceX Surges Past $2 Trillion in Nasdaq Debut, Closes in on Amazon. June 12, 2026.
4. U.S. Bureau of Labor Statistics. Consumer Price Index. Accessed July 1, 2026.
5. CME Group – FedWatch Tool. Accessed July 1, 2026.
6. Accuweather.com, June 2026.
7. FXStreet – Gold Weakens to a Seven-Month Low as Fed Rate-Hike Bets Boost the US Dollar. June 24, 2026.
8. Brookings.edu – How Important Are Central Bank Holdings of Gold? February 2, 2026.
9. CNN – Keir Starmer Announces Resignation, UK to Get Sixth PM in Seven Years. June 22, 2026.
10. RealClear Polling – Approval of Military Action Against Iran. Accessed July 1, 2026.
11. Bloomberg Financial. Author’s calculations based on daily trailing 12-month S&P 500 P/E ratios for the preceding 10 years.
12. ESPN – Inside a Knicks Celebration a Half-Century in the Making. June 14, 2026.
13. KTLA – North America Shatters World Cup Attendance Records, FIFA Says. June 28, 2026.
14. Business Insider – So Much for the AI Jobs Apocalypse. Demand for Tech Talent is Rising. June 25, 2026.
15. Bureau of Economic Analysis – Gross Domestic Product. Accessed July 1, 2026.
16. Bureau of Labor Statistics – The Employment Situation – June 2026.
17. Federal Reserve Bank of St. Louis – Consumer Opinion Surveys: Composite Consumer Confidence for United States. May 2026.
18. The Wall Street Journal – At the Private Credit Fund, Exits Have Been Restricted for Four Years and Counting. June 25, 2026.
19. Yahoo Finance – Private Credit’s Liquidity Crunch: APO and ARES Cap Withdrawals Again. June 29, 2026.

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