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US markets rally in early 2026 as geopolitical risk cools

First-half gains spanned equities and bonds, with the S&P 500 up 18% and US high yield credits rising 1.9%.

Reported · Written up by our desk · Fund Industry

Equity markets posted positive returns in the first half of 2026 as de-escalating geopolitical risk helped offset sharp oil swings and renewed inflation worries, according to ETF Trends. The Nasdaq-100 rallied more than 32% and the S&P 500 gained about 18% from the March lows, supported by strong corporate earnings tied to an AI infrastructure buildout and a still-resilient economy.

Small caps led the breadth, with the Russell 2000 recording its strongest first half since 1991, rising over 22%. Mid-caps increased about 17.4%, while international developed equities gained roughly 15.1%.

Fixed income generally held up as risk assets performed, with US high yield credits up 1.9% and municipal bonds gaining 1.8%. Treasury Inflation Protected Notes rose about 1.2%, while commodities were mixed, with silver down 17.0% and gold down 7.0%, even as crude oil surged 53.9% and broad-based commodities rose 14.4%.

ETF Trends also tied the backdrop to Federal Reserve policy, noting the Fed held the federal funds rate steady at 3.50% to 3.75% at the June FOMC meeting, its fourth consecutive hold of 2026. The outlet said the shorter policy statement and other communication shifted direction more hawkishly, including the Fed emphasizing it “will deliver price stability” and Chair Kevin Warsh not submitting a dot plot projection, alongside May PCE running 4.1% year over year and nonfarm payrolls staying firm at 172,000.

Latest closeGold $4,091.40 ▼1.3%|Silver $58.80 ▼3.5%|WTI crude $74.03 ▲5.1%

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