The Big Picture
June packed a lot into a single month. SpaceX made history with the largest IPO ever recorded, a peace agreement between the U.S. and Iran brought meaningful relief to energy markets, and the Federal Reserve held rates steady for the fourth consecutive meeting. This was the Federal Reserve Chair Kevin Warsh’s first meeting at the helm. Warsh appears less focused on giving markets detailed hints about future decisions and more focused on staying flexible as economic conditions evolve. Inflation remains above the Fed’s long-term target, though both the economy and the labor market have proven surprisingly resilient. Meanwhile, as concerns about oil supply disruptions have eased, energy prices have fallen from recent highs, a development markets are watching closely given how directly oil prices feed into inflation expectations and, ultimately, Fed policy.
What Moved Markets in June
The month’s most talked-about event was the SpaceX IPO on June 12th. Priced at $135 per share, the company raised $75 billion, the largest public offering in history, and gained 19% on its first day of trading. Shares reached an all-time high of around $225 just days later before pulling back. At its peak valuation, SpaceX would rank among the five largest companies in the world by market cap. Notably, the S&P 500 has maintained its existing eligibility requirements, meaning SpaceX cannot be considered for inclusion until at least mid-2027 and only if it meets profitability requirements. Investors are also looking ahead to the highly anticipated IPOs of OpenAI and Anthropic, which are expected to happen this fall.
On the geopolitical front, a memorandum of understanding to bring the U.S.-Iran conflict toward a formal end was signed by both presidents on June 17th. Investors have grown more optimistic that tensions in the region could continue to cool, and markets have responded accordingly. The news sent oil futures lower and stock futures higher as energy prices fell meaningfully from their war-time highs. That said, negotiations remain ongoing and the situation warrants continued attention.
On another note, one datapoint that stopped me in my tracks this month…as of June 19th, 20 stocks in the S&P 500 had doubled in value this year, and 19 of those 20 are tied to the AI infrastructure boom. The AI buildout is certainly helping fuel above-average earnings growth for the broader market.
Performance Snapshot
During June, equity markets showed mixed performance across different indices. The Nasdaq Composite fell 2.8% while the Dow gained 2.7%, a divergence that reflects a broader shift in market leadership away from technology. The S&P 500 slipped 1.0% on the month, while the Russell 2000 added 3.7%, suggesting investors may be rotating toward small-cap companies.
At the sector level, Industrials and Health Care were the standout performers in June, gaining 7.3% and 6.6% respectively. Energy continued to feel the impact of easing geopolitical tensions, falling 5.0% as oil prices retreated following the U.S.-Iran agreement. Technology, meanwhile, was essentially flat on the month, dipping just 0.1%, though that modest pause comes on the heels of a 51.3% gain over the trailing twelve months.
Fixed income markets were quiet in June, with all four major bond indices posting modest monthly gains in the 0.1% to 0.3% range. The muted returns are unsurprising given the backdrop with inflation running at 4.2% and Fed officials now leaning toward higher rates. Bond investors have little reason to expect meaningful price appreciation in the near term.
Final Thoughts
The first half of 2026 has been a good one for equity investors with the S&P 500 up over 10% through June. Despite a busy news cycle including a new Fed chair, a war in the Middle East, and a market increasingly concentrated around AI, the experience of long-term investors has once again reinforced a familiar lesson: patience is rewarded.
It is worth stepping back and recognizing how often investors have been handed reasons to step aside. Overvaluation concerns, shifting political leadership, geopolitical tensions, and concentrated market leadership are just a few examples, but the list never seems to get shorter. And yet, investors who tuned out the noise and stayed the course have historically been the ones who benefited most.
Our long-term view on equities remains positive, and that conviction does not hinge on any single Fed decision or any one geopolitical development. We continue to encourage our clients to remain fully invested, broadly diversified, and focused on the long term.
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