Summary
The first half of 2026 produced strong returns across global equities, led by developed and emerging international markets. While geopolitical tensions and market volatility have remained in focus, corporate earnings growth has continued to support stock prices.
In this update, we review investment performance through June 30, discuss the impact of the conflict in the Middle East, examine earnings growth across sectors, and explain why different index funds can produce very different results. We also share our thoughts on inflation, energy demand, AI-related infrastructure needs, and portfolio positioning for the remainder of 2026.
Key themes:
- Strong earnings growth remains the primary driver of market returns.
- International market performance varies significantly by country and index methodology.
- Energy and inflation remain important long-term considerations.
- Growing demand from AI and data centers may create future pressure on energy supplies.
- We expect continued market volatility and remain focused on disciplined portfolio management and rebalancing.