Financial markets navigated a sharp shift in macro conditions during the second quarter, moving from an environment dominated by geopolitical disruption to one increasingly driven by momentum. This led to a shift away from energy stocks, which dominated first-quarter performance, toward technology and the AI complex. Focus shifted from hyperscalers to perceived chokepoints in the AI supply chain. Semiconductors surged 60.6%, and emerging-market technology jumped 92.8%. The S&P 500 delivered a 10.2% return. Cyclical sectors — Industrials (20.2%), Technology (19.8%), and Energy (19.7%) — outpaced the broad market, while Software & IT Services (-20.0%), Financials (-1.3%), and Consumer Discretionary (-0.8%) lagged.
2nd Quarter 2026 Market Commentary
Financial markets navigated a sharp shift in macro conditions during the second quarter, moving from an environment dominated by geopolitical disruption to one increasingly driven by momentum. This led to a shift away from energy stocks, which dominated first-quarter performance, toward technology and the AI complex. Focus shifted from hyperscalers to perceived chokepoints in the AI supply chain. Semiconductors surged 60.6%, and emerging-market technology jumped 92.8%. The S&P 500 delivered a 10.2% return. Cyclical sectors — Industrials (20.2%), Technology (19.8%), and Energy (19.7%) — outpaced the broad market, while Software & IT Services (-20.0%), Financials (-1.3%), and Consumer Discretionary (-0.8%) lagged.
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