Halfway Through 2026: What the First Six Months Taught Us and What to Watch Next

By Yohance Harrison, CRPC, BFA | MoneyScript Wealth Management | July 2026

The quick answer: the first half of 2026 turned out better than most forecasts and messier than the headlines admitted. Markets set new all-time highs, earnings grew, and AI kept reshaping industries. At the same time, inflation stayed above target, a war rattled energy prices, and one of the largest IPOs in history landed in mid-June, which prompted understandable questions from clients. Here is the mid-year picture as I see it.

The Scoreboard

U.S. equities closed the first half at record levels. On June 30, the S&P 500 finished at 7,449, up 9.55% for the year, while the Nasdaq Composite gained 12.79% and the Dow Jones Industrial Average rose 8.85% to a record close of 52,319. That made it the strongest first half for the major indexes since 2020.

That is a strong result for a year that opened with war, an oil shock, and recession chatter. Within the first two months, hopes for a calmer 2026 were tested. Geopolitical conflict intensified, oil spiked, inflation held above central bank targets, and the S&P 500 fell to the edge of correction territory in the first quarter. Stocks then rebounded in a V-shaped recovery, reaching new highs in April and finishing that month solidly positive.

The market absorbed the noise, sorted through the fear, and kept moving. It has done this before.

Unlike the speculative multiple expansion of previous bull cycles, this advance has been backed by corporate earnings. Eight of eleven S&P 500 sectors reported double-digit profit margin expansion, driven by efficiency measures, stabilizing costs, and steady consumer demand.

The Engine: AI, Earnings, and a Broadening Market

The first half reinforced artificial intelligence as the largest driver of earnings growth, capital investment, and equity performance across the economy. Investors have grown used to hearing about AI through the lens of a few large technology companies. This year showed the impact reaching well beyond them, with profits growing across most of the market rather than in one corner of it.

That breadth is healthy. Some of the strongest bull markets in history took shape when leadership expanded beyond a narrow group of stocks, and that is exactly what began to unfold this spring. Traditionally value-oriented sectors such as large-cap retail, real estate, financials, and utilities were among the primary beneficiaries, as investors gravitated toward companies that can deliver consistent earnings in any economic environment.

A rising tide that lifts more boats is a healthier tide.

The Friction: Inflation, Energy, and a Patient Fed

It was a messy half in places. The conflict involving Iran and the effective closing of the Strait of Hormuz pushed Brent crude past $113 a barrel in the spring, sent inflation anxiety through Wall Street, and triggered a sharp correction in March.

The Fed's preferred inflation gauge shows prices, excluding food and energy, rising 3% over the past year, still above its 2% target. So the Fed, now under new leadership, has stayed patient, and rates have stayed where they are heading into the second half.

Richer on Paper, More Worried in Person

Here is the part of the mid-year story I find most interesting, and it has nothing to do with oil or interest rates. As a country, Americans have never held more wealth. The market sits at all-time highs, homeownership stands at a record 65%, two out of three households own stocks, and unemployment is 4.3%. At the same time, consumer sentiment sits at a record low. We are richer on paper and more worried in person.

I see this gap in meetings every week. A physician two years into attending income, retirement accounts finally growing, student loans shrinking on schedule, will sit across from me and ask whether they should be doing something different because the economy "feels bad." Then we open the plan together and every line is moving in the right direction. The worry arrived through the headlines, the group chat, the colleague in the physicians' lounge. It did not come from anything in their own accounts.

There is a reason for the mismatch. Your brain gives bad news a front-row seat. A frightening headline about oil or inflation feels urgent and specific, while the steady growth in your 401(k) feels abstract, so fear gets treated as fact. Behavioral economists call this negativity bias. I call it paying for the news with your peace of mind.

Two moves help when this describes you. First, measure your progress against your own plan on your own schedule; that is exactly why we review it together. Second, before acting on a worry, trace where it came from. If it arrived by headline or group chat rather than from a change in your life or your goals, it has earned a conversation, and only a conversation, so far.

The Headline Everyone Asks About: SpaceX (SPCX)

On June 12, SpaceX went public. The company initially sold 555.6 million shares, raising a record $75 billion. After underwriters exercised their over-allotment option and sold an additional 83.3 million shares, total proceeds climbed to $85.7 billion.

Shares surged more than 19% on the first full trading day and extended gains to 43% shortly after the debut. Space Exploration Technologies Corp. provides satellite-based broadband internationally through its Starlink network in low-earth orbit, and its Space segment designs, manufactures, and launches reusable rockets. Since its peak, the stock has dropped 38.5% despite strong revenue growth and continued AI investment. Analysts hold a generally positive outlook with a consensus price target of $235.26, alongside ongoing concerns about valuation and execution risk.

From a behavioral standpoint, SpaceX is a live test of two competing forces: the excitement of novelty and loss aversion once the price stops cooperating. The company is genuinely extraordinary. Extraordinary companies and extraordinary investments are two different purchases, especially when today's price already includes years of future optimism.

For those asking whether to chase SPCX, the question is usually less about the company and more about the fear of being left out. If the pull is strong, set a rule before you act: decide in advance what percentage of your portfolio you are willing to commit to any single speculative position (for most of our clients, 5% or less), and let the rule make the decision instead of the headline.

What the Second Half May Hold

A word about limits first: I don't know what the next six months will bring, and neither does anyone selling certainty. What we can say is that the path forward looks constructive, with solid earnings growth expected to support global equities, alongside higher concentration risk and a live possibility that inflation disrupts returns. Expect more frequent bouts of volatility, and treat them as a normal feature of investing rather than a signal to exit.

One number worth watching: total assets in money market funds have reached a record $7.9 trillion. That is a large reserve of cash sitting on the sidelines, and when cash like that moves, it tends to find its way into equities.

The structural foundation remains intact. Growth continues, earnings are healthy, and this bull market has never required a perfect world--only one improving at the margins.

What This Means for You

Mid-year is a moment to pause and review rather than react. Three questions worth sitting with:

• Is your portfolio still aligned with your goals, or only with what performed well this year?
• Are you holding excess cash while waiting for a pullback that may never arrive on schedule?
• Does the anxiety you feel match your actual financial picture, or is it manufactured by headlines designed to keep you watching?

The first half of 2026 offered another reminder that markets reward patience more reliably than prediction. Investors who stayed the course in March captured the recovery in April. Investors who chased SpaceX on day one absorbed the pullback by July. Your plan should be built to outlast both stories.

If you want to review your positioning for the second half of the year, schedule a conversation with our team at MoneyScript Wealth Management.

This material is for informational and educational purposes only. It does not constitute investment, tax, or legal advice. Past performance is not indicative of future results. Please consult a qualified financial professional before making any investment decision.

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