Published on July 08, 2026

2026Q2 - Quarterly Market Rundown: Neither Rain nor Rates nor Closure of Straits

The U.S. economy demonstrated remarkable resilience in Q2, with broad-based growth across labor, manufacturing, and services, continued momentum from AI-driven investment, and strong equity market gains—shifting the key market risk from insufficient growth to potentially overheating economic conditions.

Written by Dan Phillips, CFA

2026Q2 - Quarterly Market Rundown
Neither Rain nor Rates nor Closure of Straits

Taking a page from the U.S. Postal Service, seemingly nothing can prevent the U.S. economy from delivering growth, brushing aside higher oil prices (peaking at ~$113/barrel) and higher interest rates (the 10-year U.S. Treasury yield peaking at 4.67%). The economic expansion not only continued but broadened in Q2 – as synchronized demand across the labor markets, manufacturing and service sectors set a solid foundation for the growth outlook in the quarters ahead. The AI buildout has shown few signs of slowdown and continues to fuel both the economy and global equity markets, which recorded their best quarterly gain in over five years. Looking ahead, the key risk to ongoing stock market gains is no longer too little economic growth – but too much.

Click to read entire report: 2026Q2 - Quarterly Market Rundown: Neither Rain nor Rates nor Closure of Straits