U.S. stocks concluded the first half of 2026 on a strong note, with the S&P 500 securing its best quarterly performance since 2020. The benchmark index gained 0.79% to close at 7,499.36 on Tuesday, finishing the second quarter up 14.9% and the first half with a 9.6% gain. However, traders on Polymarket are betting the index could start the second half on a weaker footing, implying just a 27% probability that the S&P 500 will open higher on Wednesday. S&P 500 futures were modestly lower early Wednesday, slipping 0.38%.

Quarterly and Market Performance

The Nasdaq Composite outperformed, rising 1.52% to 26,213.72, marking a 21.4% surge in the second quarter—its largest quarterly gain since Q2 2020—and a 12% climb in the first half. The Dow Jones Industrial Average added 136 points to close at 52,319.20, gaining 12.9% in Q2 and 8.9% in the first half, its best first-half performance since 2021. The table below details the market performance:

Sector Movements and Corporate Movers

Record gains in artificial intelligence and semiconductor stocks powered equities higher during the first half. Chipmakers including Nvidia Corp., Advanced Micro Devices Inc., and Intel Corp. led Tuesday's advance, with Nvidia rising 2.6% and AMD surging 7.7%. The VanEck Semiconductor ETF (SMH) climbed more than 3%. Despite the rally, most sectors on the S&P 500 closed on a negative note, with real estate, utilities, and consumer staples recording the biggest losses, while information technology and industrials were the top performers.

Economic Data and Outlook

Investors are looking ahead to fresh economic data for clues on interest rates. The ADP employment report and ISM manufacturing survey are due Wednesday, followed by the June jobs report on Thursday. A stronger labor market could cement expectations that the Federal Reserve will maintain a restrictive policy stance. On the data front, the S&P CoreLogic Case-Shiller home price index rose 1.1% year-over-year in April, topping estimates, while the Chicago Business Barometer declined to 56.7 in June. The CNN Money Fear and Greed index improved to 31.3, remaining in the "Fear" zone.

U.S. stocks settled higher on Thursday, with the Nasdaq Composite surging almost 500 points during the session, led by a sharp rally in semiconductors, as a signed U.S.-Iran peace deal sent oil tumbling. The CNN Money Fear and Greed index showed an improvement in the overall market sentiment, though it remained in the "Fear" zone. The S&P 500 rose 0.9% last week, recording its 11th winning week in 12, while the Dow gained 0.7% and the Nasdaq surged 2.4% during the period.

Federal Reserve Policy

The Federal Reserve, on Wednesday, unanimously held the federal funds rate steady at 3.50%-3.75%, as widely expected, in the first policy meeting under new Fed Chair Kevin Warsh. The Fed’s closely watched dot plot showed that several officials now expect interest rates to rise in 2026. The Fed penciled in higher inflation, a lower unemployment rate and one hike this year, marking a hawkish shift from the March dot plot, which had signaled one additional rate cut.

Market Movers

Intel Corp surged more than 10% on Thursday after President Donald Trump said on Truth Social that Apple Inc had agreed to work with Intel to design and build its chips in America. Most sectors on the S&P 500 closed on a negative note, with energy, financial and health care stocks recording the biggest losses. However, consumer discretionary and information technology stocks closed the session higher.

Economic Data

U.S. initial jobless claims fell by 4,000 to 226,000 in the second week of June, compared to market estimates of 225,000. The Philadelphia Fed manufacturing index rose to 10.3 in June from -0.4 in the previous month, compared to market estimates of 10.

Market Sentiment

At a current reading of 37.3, the Fear & Greed Index remained in the "Fear" zone on Thursday, versus a prior reading of 32.2. The index is a measure of the current market sentiment, calculated based on seven equal-weighted indicators ranging from 0 to 100, where 0 represents maximum fear and 100 signals maximum greediness.