We have officially reached halftime of 2026.
And with World Cup fever in the air, it feels like the right time for a little halftime analysis.
As a USMNT fan, I’m well-trained for this kind of thing. Hope, anxiety, questionable finishing, a few moments of brilliance and the constant sense that something weird is about to happen.
Fortunately, Mauricio Pochettino has this group playing disciplined, professional soccer throughout the World Cup. It’s been a refreshing change from some of the previous U.S. teams we’ve watched over the years.
Markets, of course, are rarely that tidy.
The first six months of 2026 had a little bit of everything: some beautiful attacking play, a few defensive breakdowns, a questionable call or two and plenty of moments where investors were left staring at the screen thinking, “Wait… what just happened?”
War in Iran. Oil prices surging. Inflation concerns. A new Fed Chair. AI questions. IPO headlines. All-time highs.
Not exactly a quiet first half.
And yet, when the whistle blew at the end of June, the scoreboard looked pretty good.
The first half of 2026 was another reminder that markets do not need perfect conditions to move higher.
They just need enough things to keep working.
And so far, enough things have.
First Half Scoreboard
Through the end of June:
The S&P 500 was up 9.6%. The Nasdaq was up 12.8%. The Dow was up 8.9%.
The second quarter was especially strong, with the S&P 500 gaining 14.9%, the Nasdaq jumping 21.4% and the Dow rising 12.9%.
That is not a bad first half.
International markets also put some points on the board. Developed international stocks gained 7.7% while emerging markets jumped 22.7%.
Bonds were quieter, but still positive. The Bloomberg U.S. Aggregate Bond Index rose 0.6% year-to-date, even as the 10-year Treasury yield moved from 4.17% at the start of the year to 4.47% by the end of June.
So yes, there were plenty of anxious moments.
But the scoreboard matters.
And the scoreboard was strong.
Remember May?
Last month, I wrote that May was, to use the technical term, a kick-ass month. Pardon my French.
The broader point was that time flies, compounding can feel invisible while it is happening and markets often move before investors feel fully comfortable.
That theme carried straight through the end of June.
May reminded us that all-time highs are not necessarily warning signs. They can feel uncomfortable because nobody likes the idea of “buying high,” but long-term progress requires markets to make new highs along the way.
The first half gave us more of the same.
The S&P 500 has already reached 24 new all-time highs this year.
That does not mean the rest of the year will be smooth.
It does not mean we avoid pullbacks.
It does not mean investors get to relax for the next six months.
It just means that new highs are often what a functioning long-term market looks like.
The question is not, “Is the market too high?”
The better question is, “Is my portfolio built so I can stay invested when the next normal bout of volatility shows up?”
Because that is where the real work happens.
Not at the all-time high.
After it.
The Market Advanced Out of a Tough Group
If the first half of 2026 were a World Cup group, it was not exactly an easy draw.
Inflation was in the group. Oil prices were in the group. Geopolitics was in the group. Interest rates were in the group. And somehow, AI volatility and IPO hype were probably waiting on the bench.
That is a tough path.
And yet, markets advanced.
The current business cycle began in April 2020 during the pandemic, which means this expansion has now entered its seventh year.
That may feel surprising because we have spent much of the past few years hearing that a recession was right around the corner.
Inflation spike? Recession worries. Rate hikes? Recession worries. Tariffs? Recession worries. Oil shock? Recession worries. Pick any Tuesday? Probably recession worries.
And yet, the economy kept playing.
The job market has picked up, business investment has grown, consumers remain cautious but continue to spend and the dollar has stabilized. Inflation is still elevated, but if oil prices continue to ease, that could help take some pressure off.
None of this means the economy is invincible.
It is not.
Recessions are part of the cycle.
But this cycle has been more resilient than many expected.
Markets do not need perfect.
They need progress.
Diversification Is Not Always Pretty, But It Wins Matches
Every good soccer team needs more than one way to score.
You need a striker. You need midfielders who can control possession. You need defenders who do the unglamorous work. You need a goalkeeper who saves you when things get messy.
Portfolios work the same way.
The first half of the year was encouraging because returns were not limited to one narrow part of the market.
Large U.S. companies contributed. Small caps participated. International stocks participated. Emerging markets had a great first half. Commodities helped earlier in the year. Bonds provided some stability and income.
That matters.
Diversified portfolios are not built around the idea that every position works every month.
They are built around the idea that different pieces work at different times.
Sometimes U.S. large caps are your striker.
Sometimes international stocks make the run nobody saw coming.
Sometimes bonds sit back, defend and keep you from doing something dumb in a volatile stretch.
Sometimes the boring pieces are the reason you stay in the game.
The goal is not to guess who scores next.
The goal is to build a lineup strong enough that you do not have to.
Earnings Are Still the Star Player
Speaking of World Cup moments, can we talk about the “hydration breaks” for a second?
Is it for the players?
Sure.
Is it also a conveniently timed opportunity to sell a few more commercials?
Also sure.
See? I told you corporations always figure out a way to make money.
And that, in a roundabout way, brings us back to the market.
If I sound like a broken record here, good.
That means the record is still playing.
Markets move around in the short term for all sorts of reasons: headlines, sentiment, interest rates, politics, oil prices and whatever narrative happens to dominate the day.
But over the long run, earnings do most of the heavy lifting.
And earnings have been solid.
S&P 500 corporate profits have risen more than 20% over the past twelve months. That helps explain why markets have been able to move higher despite elevated interest rates and plenty of uncertainty.
Now, valuations are not cheap.
The S&P 500 is trading around 20x earnings, above the long-term historical average of roughly 16x.
That does not mean the market must fall.
Valuations are a pretty terrible short-term timing tool.
But it does mean future returns may depend more heavily on companies continuing to deliver earnings growth. It also reinforces the value of owning a balanced portfolio instead of chasing whatever looks unstoppable at the moment.
In soccer terms, earnings are still the player who actually puts the ball in the net.
Everything else is commentary.
IPO Hype Is Fun. It Is Not a Game Plan.
The first half also gave us one of the splashier market stories of the year: the SpaceX IPO.
And as I wrote in the most recent Special Edition of The Broadcast, IPO days can be exciting.
They can also be confusing.
SpaceX priced its IPO at $135 per share. Shares were indicated around $150 before trading began. But the first actual public trade happened at $160, and shares traded as high as $176.52 before finishing the day at $161.19.
Just a few trading days later, shares closed at $201.80.
Today? They're back around $158.
If there's one lesson, it's this:
Short-term prices are driven by excitement, supply and demand, momentum and emotion. Long-term returns are driven by the business itself.
Whether you bought at $160, $176 or $202 probably feels incredibly important today.
Ten years from now, it may barely matter.
What will matter is whether SpaceX continues to innovate, grow earnings and create value for shareholders.
That's the difference between investing and trading.
That lesson applies far beyond IPOs.
A hot company can still be hard to value. An exciting story can still be a volatile stock. A great business can still be a bad investment at the wrong price.
For most investors, the goal is not to win the first few minutes after the opening whistle.
The goal is to build a portfolio that can benefit from innovation, earnings growth and compounding over time.
That may not be as exciting as watching a stock launch higher on day one.
But it is usually a much better way to invest.
Oil, Inflation and the Momentum Swing
Oil was one of the biggest stories of the first half.
The conflict in Iran disrupted oil transportation and pushed Brent crude close to $120 per barrel. That helped drive headline inflation higher, with CPI rising 4.2% year-over-year in May.
But by the end of the quarter, oil had fallen back to around $73 per barrel.
That is a big swing.
Gas prices also eased after moving sharply higher. Core CPI, which strips out food and energy, rose 2.9% year-over-year. Still above the Fed’s comfort zone, but not nearly as dramatic as the headline number.
So yes, inflation is still an issue.
But it is not one story.
Energy prices matter. The Fed matters. Consumer spending matters. Wages matter. Supply chains matter.
Markets are complicated because the economy is complicated.
Which is exactly why reacting to one headline at a time is usually like chasing the ball all over the field.
It feels active.
It is not always effective.
Volatility Was Manageable, Even If It Did Not Always Feel That Way
Despite everything going on, volatility stayed relatively contained.
The VIX, a common measure of expected stock market volatility, recently sat around 16, below its long-term average of 18.4.
The S&P 500’s largest peak-to-trough decline this year was about 9%, and the market has since recovered to new highs.
Again, the S&P 500 has already reached 24 new all-time highs this year.
That is a great reminder of something we have talked about before:
All-time highs are not warning signs by themselves.
They are often just what long-term progress looks like.
That does not mean the market goes straight up from here.
It will not.
New highs can absolutely come with pullbacks, corrections and volatility. A team can be winning 2-0 and still give you heart palpitations in stoppage time.
But the existence of a new high is not, by itself, a reason to abandon a long-term plan.
Cash Feels Like Parking the Bus
One of the more interesting data points right now is that money market fund assets have reached a record $7.9 trillion.
That is a lot of money sitting in cash-like investments.
And I get it.
Cash feels safe.
It does not bounce around like stocks. It does not show red on a bad market day. It gives people the feeling of control.
In soccer terms, cash can feel like parking the bus with a one-goal lead.
Sometimes that makes sense.
If you have money set aside for emergency needs, near-term spending or something that cannot afford market volatility, cash has a role.
But as a long-term investment strategy?
You cannot win the tournament by playing defense for 90 minutes every match.
Cash has its own risk: inflation.
When the return on cash does not keep up with rising prices, purchasing power quietly erodes. You do not see it in a dramatic one-day move. You see it over time.
That is the sneaky part.
Cash may feel safe.
But for long-term goals, it is usually not where wealth compounds.
That job belongs to diversified portfolios built around growth, income and patience.
The Real Lesson From the First Half
The first half of 2026 was not quiet.
It gave investors plenty of reasons to worry.
War. Oil. Inflation. Interest rates. A new Fed Chair. AI debates. IPO excitement. Election season warming up.
And yet, investors who stayed diversified and stayed invested were rewarded.
That is the point.
The market does not wait until the field is perfectly dry, the referee is perfect and every bounce goes your way.
It does not wait until headlines are calm.
It does not wait until everyone feels comfortable.
Often, the market moves higher while the reasons to worry are still sitting right there in plain sight.
That was the lesson in May.
That was the lesson from the SpaceX IPO.
And that was the lesson again in the first half of the year.
Do not confuse excitement with a plan.
Do not confuse volatility with failure.
Do not confuse a new high with a warning sign.
And do not confuse sitting still with falling behind.
Sometimes staying disciplined is the play.
Second Half Outlook
Now we head into the second half.
And just like any World Cup knockout round, the path from here will probably get weird.
The Middle East conflict could change direction. Oil prices could rise again. Inflation could remain sticky. The Fed could surprise markets. Midterm election headlines will get louder. IPOs will keep attracting attention. AI will continue to inspire both optimism and skepticism.
There will be something.
There is always something.
But that is not a reason to abandon the plan.
It is the reason to have one.
The Bottom Line
The first half of 2026 rewarded investors who stayed disciplined.
Not because everything went perfectly.
It did not.
But because a well-built portfolio does not require perfect conditions to work.
It requires time, diversification, earnings growth and the ability to avoid emotional decisions during noisy periods.
That is not exciting.
It is not flashy.
It will not generate the same kind of headline as a hot IPO, an AI stock going vertical or a last-minute World Cup winner.
But it works.
And at halftime of 2026, the scoreboard says it worked pretty well.
The plan works.
Stay invested.
Before I sign off, I'd like to wish our USMNT the best of luck tonight as they continue their World Cup journey. And as we celebrate our 250th Independence Day this week I hope you and your family enjoy a safe, relaxing and memorable holiday.
Here's to a strong second half - both on the pitch and in the markets.
Until next time, take good care!
