We didn’t know it at the time, but the table was perfectly set in late March for what ended up being a historic quarter for stocks.
While we were all tending to our March Madness brackets, the US and Iran gave investors something they’d been craving: an apparent two-sided de-escalation of their ongoing war. Major indexes rallied more than 2% on the final day of the month.
No, the war didn’t actually end then. But it was on March 31 that investors officially priced in a resolution. The result was a market bottom that’s a clear inflection point in any historical chart you look at — and synced up perfectly with the start of a new quarter.
The rest is literally history … or at least some of it is. Here are the key stats that defined one of the strongest quarters for stocks in recent memory:
The S&P 500 and Nasdaq 100 had their best quarters since 2020
At the broadest index level, the second quarter of 2026 was a resounding success. And it has tech to thank. The sector, which has been under tight scrutiny for the hundreds of billions of planned spending on AI capex, seemed to convince traders that the investments are worth it (with some notable exceptions). The S&P 500 rose 15% and the Nasdaq was up 28%.
Chipmakers in particular were also an immense bright spot for tech. Speaking of which…
The SOX index had its best quarter ever
Some of the moves in the Philadelphia Semiconductor Index (SOX) — particularly when it comes to memory chips — were downright silly in the second quarter. Here’s a small selection: Micron (+242%), Intel (+216%), Marvell Technology (201%), and AMD (+186%). And we can’t forget Sandisk, which isn’t currently in the index, but which soared 258%.
Those moves culminated in a record 88% surge for SOX.
Small caps had their best quarter since 2020 (and best first half since 1991)
The Russell 2000 index of small-cap names soared 21% in the second quarter. Zooming out to six months, the gauge posted its best first half of a year since 1991.
The hot run for smaller stocks is an encouraging sign that stock-market breadth is improving. A popular bear argument has long been that the market is too top heavy. That appears to be shifting.
Energy stocks had their worst quarter since 2020
These declines were a byproduct of crude oil prices plummeting over the same period. Falling oil alleviated some inflation concerns for investors, allowing them to focus on the earnings-growth potential of AI.
What’s next
Yes, last quarter was unabashedly positive for the stock market. But the quarter-level performance masks some weakness in June that struck software stocks, pushing AI hyperscalers like Microsoft and Oracle sharply lower. The delicate balance between AI development and disruption will be something to keep watching.
There’s also Kevin Warsh, the new Fed chair whose next move is continuously being parsed by investors. When he and the FOMC ultimately decide to start raising rates will be a huge deal for markets.
And lastly, mega-cap tech earnings are due this month, with the entire Magnificent 7 (minus Nvidia) reporting by the end of July. It’s not an exaggeration to call it a make-or-break season.
Source: Original Article
