U.S. Versus International
The S&P 500 Index, an index of large U.S. companies, posted a price return of 14.9% for the Second Quarter of 2026. Large U.S. stocks outperformed international for the quarter as measured by the iShares MSCI ACWI ex-US Index, a representation of international stocks outside the U.S. The International ETF return for the Second Quarter of 2026 was 12.4%.
Ongoing conflict in Iran has put pressure on international stocks versus U.S. The differential was quite small, keeping international stocks ahead of U.S. year-to-date. Chinese stocks have fallen year to date due to pressure from U.S. tariffs and a general slowdown in consumer purchases.
Taiwan and South Korea stocks fared well in the quarter due to the strong rally in technology stocks. These countries are also less impacted by conflicts in Eastern Europe and Iran.
U.S. Sectors
Top performing U.S. S&P 500 sectors as reported by Koyfin for the Second Quarter of 2026 include Technology (43.5%), Industrials (14.8%) and Financials (9.0%). Laggards for the Second Quarter include Energy (-12.7%), Communications (-3.1%) and Utilities (-0.6%).
Energy stocks gave back a chunk of their year-to-date gains as the flow of oil seems to have been less impacted than expected by closing the Straight of Hormuz. The energy sector remains up 20.4% year-to-date despite the sharp decline in the second quarter.
Technology stocks staged an astounding rise in the second quarter, up 43.5%. This increase was driven by the ongoing demand of Artificial Intelligence (A.I.) stocks and prospects for developments in space. The appropriate sector for SpaceX has not been announced yet, however it will be included in the NASDAQ 100 on July 7th. Speculations include Communications or Industrials.
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