Markets were quieter in June than in previous months, but there were still plenty of notable developments
Markets were quieter in June than in previous months, but there were still plenty of notable developments. The S&P 500 fell 1.06%, with growth areas taking a slightly larger hit, as the Nasdaq Composite dropped 2.81%. Unlike what we’ve been used to over the last several years, it hasn’t been the market’s biggest companies pushing things higher over the past month or the full year. The fifty largest stocks in the S&P 500, represented by XLG, were down by nearly 5% in June, and are up less than 3% YTD. Conversely, the average stock, represented by the equal weight S&P 500, was up 2.2% last month while gaining 11.4% so far in 2026. Smaller companies in the market performed even better, with the Russell 2000 rising nearly 3%, bringing its full-year return north of 20%. While the largest companies have demonstrated the most long-term strength given their consistent performance over the past few years, the gap in strength between companies of different sizes is at its narrowest margin in years.
The end of June also marks the end of the second quarter, during which the market put together one of its strongest performances in recent memory. The S&P 500 and Nasdaq Composite gained 14.9% and 21.3% during Q2, respectively, both of which were the best quarterly gains since Q2 of 2020. Upside within the market was led by the technology sector, with representative XLK rising almost 40% over the last three months, even with the group pulling back slightly in June. Semiconductors continue to be one of the market’s hottest trades, as representative SMH rose another 9.5% in June, bringing its Q2 return to a mind-boggling 71%. Despite recent upside coming disproportionately from tech, the broader market has still pushed higher. Industrials, Healthcare, and Financials also remain points of recent strength and are some other solid sectors within US equities. Meanwhile, more than 60% of S&P 500 stocks trade in a positive trend, highlighting the broad-based upside seen within the market.
Looking at other asset classes, US and Foreign equities remain the two strongest groups by a wide margin, especially with commodities weakening in June. Brent crude fell 20% last month, leaving it more than 40% off its highs as conflict in the Middle East began to ease. Meanwhile, gold fell 11.7% in June and is now down more than 25% from its highs earlier this year. As a result, the broader commodity space has weakened significantly, leaving a large gap between it and global equities. For now, risk-on on asset classes and equities remain points of emphasis as we look toward the back half of 2026.
