Equities staged a remarkable comeback with the S&P 500 rising over 10% and the NASDAQ surging over 15%. Strong earnings and fading fears of US-Iran escalation drove the rally.
Growth stocks meaningfully outperformed value stocks in a reversal from the prior three months, led by the Technology, Consumer Discretionary, and Industrials sectors.
Oil remains a key story with Brent Crude ending the month at $114 per barrel, putting upward pressure on inflation and causing a challenge for central banks who face rising stagflation risks: rising inflation with slowing growth.
Treasury bonds struggled as hopes of a rate cut faded on the back of energy-driven inflation concerns Resulting in the yield on 10-year Treasuries to jump to 4.3%.
AI players delivered strong earnings citing rising adoption and accelerating revenue growth which helped ease concern over excessive capital spending.
Despite geopolitical stress, gold prices have remained down since the start of the conflict with Iran, bucking traditional expectations of being a safe-haven asset.
The Iran conflict continues to be the wildcard for market expectations for the remainder of 2026. High oil prices may continue to put upward pressure on inflation, forcing the Fed to hold off on rate cuts. A resolution in the Strait of Hormuz would be the single biggest positive catalyst for risk assets.
The AI boom is shifting from “buying the theme” to identifying the winners and losers as the space matures. Companies that are able to deliver on earnings are likely to separate themselves from those only offering promises and dreams.
Portfolios remain heavily concentrated in US growth, and AI-centric equities may benefit from diversifying into smaller-cap and international markets, particularly should there be relief in the oil markets.
Conflicting economic data is making it hard to see a clear path for the Fed, with three presidents calling for removing guidance that the Fed has an “easing bias”. Rate uncertainty is likely to create elevated volatility in the bond markets.
We continue to recommend maintaining and expanding diversification within portfolios, tapping into uncorrelated markets such as commodities and private markets, where appropriate, to help dampen equity market volatility while maintaining attractive returns and income potential.
Advisory services are provided by Bison Wealth, LLC (“Bison”) an investment adviser registered with the SEC. Registration does not imply a certain level of skill or training. The information contained herein is for informational purposes only, is believed to be reliable, has not been independently verified and is based on the opinions of Bison and subject to change at any time without notice. Nothing herein should be deemed an offer or solicitation to buy or sell a security or to provide investment advice. All investments contain risks to include the total loss of invested amounts. Past performance is not indicative of future results. Diversification does not protect against losses.
Index Disclosure
An index typically measures the performance of a basket of securities intended to replicate a certain area of the market, asset class or geopolitical region among others. Indices do not represent investments in actual accounts. Investors cannot invest directly in an index. The asset classes noted here reflect the following indices: “U.S. Large Cap” represented by the S&P 500 Index. “US Mid Cap “represented by the S&P 400 Index “U.S. Small Cap” represented by the S&P 600 Index. “International” represented by the MSCI Europe, Australasia, Far East (EAFE) Net Return Index. “Emerging” represented by the MSCI Emerging Markets Net Return Index. “U.S. Aggregate” represented by the Bloomberg U.S. Aggregate Bond Index. “Treasuries” represented by the Bloomberg U.S. Treasury Bond Index. “Short Term Bond” represented by the Bloomberg 1-5 year gov/ credit Index. “U.S. High Yield” represented by the Bloomberg U.S. Corporate High Yield Index. “Real Estate” represented by the Dow Jones REIT Index. “Gold” represented by the LBMA Gold Price Index. “Bitcoin” represented by the Bitcoin Galaxy Index.