Second Quarter Commentary

• U.S. equity markets rebounded sharply during the quarter as easing geopolitical tensions, declining energy prices, and renewed enthusiasm surrounding AI supported investor sentiment. Strong corporate earnings and resilient economic data further fueled the rally, while market leadership broadened beyond the largest technology companies as risk appetite improved. Large-cap equities, represented by the S&P 500, returned +15.2%, while the “Magnificent 7” gained +11.2%. Mid-cap & small-cap equities also participated in the rally, as the Russell 2500 returned +20.3% for the quarter, while the Russell 2000 finished the quarter up +21.5%.
• International developed and emerging markets also posted strong gains during the quarter, benefiting from improved risk sentiment, continued investment in AI infrastructure, and solid economic activity across several regions. Performance was particularly strong in markets with significant exposure to semiconductor and technology supply chains, while easing concerns surrounding global growth and energy markets provided additional support. The MSCI EAFE Index returned +10.8% for the quarter. Emerging market securities outperformed developed markets, with the MSCI EM Index returning +24.1%.
• In the second quarter, the U.S. Federal Reserve maintained the federal funds rate at a target range of 3.50% - 3.75%. The June FOMC meeting marked Kevin Warsh’s first as chairman, during which he emphasized the Fed's commitment to restoring price stability and signaled that rates could remain elevated for longer than markets had expected. He also introduced changes to Fed communications, including a shorter policy statement, reduced reliance on forward guidance, and the creation of task forces to review best practices at the Fed. Current FOMC projections indicate support for one 25 basis point hike in 2026, though members are still divided given the uncertainty surrounding the effects of trade policy and conflict in the Middle East.
• During the quarter, the yield curve shifted higher and flattened, with short and intermediate-term rates rising more than longer-dated maturities, driven by a combination of volatile short-term inflation expectations and hawkish rhetoric from the Fed.

To view the second quarter reports, click on the links below: 

• 2Q26 Global Positioning Statement
• 2Q26 Global Equity Review
• 2Q26 Taxable Fixed Income Review
• 2Q26 Tax Exempt Fixed Income Review
• 2Q26 Real Assets Review
• 2Q26 Private Credit Review