July 2026 Newsletter

Dear friends,

As markets pause for the long holiday weekend, I want to wish you all a cool and fireworks-filled July 4th. On America’s 250th birthday, we celebrate the freedoms and opportunities that have allowed our financial markets, businesses and communities to thrive. Here’s to continued innovation, resilience and prosperity for all Americans. Please feel free to contact us if you have any questions or concerns that our office can address.

By, Jaysen Bohrod, CFA

Market Commentary

The first half of 2026 tested investors’ nerves more than most. Despite war in the Middle East, a new Federal Reserve chair and ever changing inflation expectations, the U.S. equity market delivered solid gains. The S&P 500 climbed roughly 9%, while the Nasdaq Composite outpaced it rising nearly 11%. Earnings have been the unsung hero of the rally. S&P 500 companies posted some of the strongest growth in years, with consensus estimates now calling for over 20% earnings growth for 2026. The Artificial Intelligence infrastructure buildout remains the dominant theme, but the benefactors have broadened well beyond the mega-cap names that drove the returns the past several years. Memory and semiconductor companies have been the standout winners, as AI workloads increasingly strain global chip supply. Industrials and utilities tied to power generation and data center construction have seen their backlogs and earnings accelerate sharply. That being said, valuations entered this year stretched, with the S&P 500’s Price-to-Earnings ratio near 22x so continued volatility is expected as markets digest whether the AI driven capital spending can translate into profit.

The fixed income story was more complicated. The Federal Reserve held its policy rate steady at 3.50%-3.75%, but the narrative shifted dramatically as the year progressed. Markets entered 2026 expecting two to three rate cuts and by mid year, with inflation re-accelerating due to higher energy costs, those cuts had been fully priced out. The new Fed chair Kevin Warsh struck a notably hawkish tone during his first press conference, emphasizing price stability and breaking from the Fed’s recent practice of offering explicit forward guidance, although the expectation is for rate hikes. The 10 year Treasury yield has risen from ~4% to ~4.5%, while core PCE inflation has climbed to roughly 3.4%, well above the Fed’s 2% target.

Energy markets were the epicenter of this year’s volatility. The escalating conflict in the Middle East, including direct attacks on shipping and energy infrastructure near the Straight of Hormuz, sent crude oil surging from the high $50s in January to a peak of over $112 per barrel in April. Traders priced in a sustained disruption to a corridor that carries a significant portion of the worlds seaborne oil. The spike lifted inflation expectations, put pressure on consumers and forced the Fed to abandon its thoughts on easing rates. Relief came gradually as tanker traffic through the straight began to normalize as negotiations gained traction. Oil prices have since retreated to pre-war prices.

Looking into the second half of 2026, investors face a market that leaves little room for disappointment. The fragile de-escalation in the Middle East will determine where markets head. Diversification across market capitalization, geography, and industry will continue to reward investors.

Trump Accounts

The new Trump Accounts allow parents or guardians to establish a new type of Individual Retirement Account for their children who have not turned age 18 before the end of the calendar year in which the election is made. The account is fully in the child's name, and the parent/guardian is the sole custodian until they turn 18. The child must have a valid Social Security number for the account to be opened.

The account features a pilot program contribution of $1,000 for children born between Jan. 1, 2025, and Dec. 31, 2028, and who are U.S. citizens with a valid Social Security number.

There are no contributions necessary, but you can deposit up to $5,000 per year to maximize growth. At 18 years old the account is fully in the child’s name only. They are free to continue letting the account grow like a traditional IRA, or they can withdraw funds for qualified expenses such as education, purchasing a first home, or starting a business. Withdrawals may be subject to restrictions and would be taxed at ordinary income rates. Per IRS Notice 2025-68, Trump Accounts will generally be treated as, and subject to same rules as, other traditional IRAs.

To open an account for your child, sign in to your IRS account with ID.me & submit Form 4547.

To learn move visit:

https://www.irs.gov/trumpaccounts

https://www.trumpaccounts.gov

2026

IRA / ROTH CONTRIBUTIONS =

$7,500 up to age 50; $8,600 ages 50+

GIFT TAX =

$19,000 per person;

$38,000 per married couple

Stock Market Holidays/ Office Closures

July 3, 2026 - Independence Day Observed

September 7, 2026 - Labor Day

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