Remember when everyone was freaking out about the Iran war in March? Yeah, well, the market decided to just… price in a resolution on March 31st and never looked back. It was like the financial equivalent of flipping a switch. That day marked the bottom, and what followed was one of the most ridiculous quarters for stocks in recent memory. Here’s the receipts.
The Big Indexes Went Full Send
The S&P 500 and Nasdaq 100 just had their best quarter since 2020, and honestly, it wasn’t even close. The S&P climbed 15%, but the Nasdaq? That thing went absolutely nuclear with a 28% surge. And before you ask—yes, it was all about tech. Investors apparently decided that spending hundreds of billions on AI capex was actually a good idea. Shocking, I know.
Semiconductors Entered the Chat (and Stayed)
If you thought the Nasdaq was wild, the Philadelphia Semiconductor Index (SOX) basically broke the internet. We’re talking about a record 88% gain for the quarter. Individual chip stocks? Absolutely unhinged. Micron jumped 242%. Intel soared 216%. AMD? 186%. Even Sandisk, which isn’t even in the index, managed a 258% moonshot. These aren’t normal numbers. These are “someone found a money printer” numbers.
Small Caps Finally Got Their Moment
The Russell 2000 had its best quarter since 2020, posting a 21% gain. But here’s the really interesting part: the first half of 2026 was the best first half for small caps since 1991. That’s 35 years of history. This matters because it means the market’s finally spreading the wealth beyond the mega-cap tech crowd. The “market is too top-heavy” argument is starting to look a little tired.
Energy Got Absolutely Wrecked
While everyone else was partying, energy stocks were having the worst quarter since 2020. Oil prices tanked, which sounds bad for energy companies but actually helped the broader market by easing inflation concerns. Investors could finally stop worrying about stagflation and just focus on whether AI investments would actually pay off.
So What Now?
Here’s the thing: Q2 looked amazing on paper, but June showed some cracks. Software stocks got hammered, and AI darlings like Microsoft and Oracle took some serious hits. The whole “will AI investments actually generate returns?” question is still very much on the table.
Then there’s Kevin Warsh, the new Fed chair, and everyone’s obsessed with when he’ll start raising rates. That’s going to be huge for markets.
And finally—and this is important—the Magnificent 7 (minus Nvidia) is reporting earnings this month. Microsoft, Apple, Google, Amazon, Meta, and Tesla all have their moment. This isn’t just earnings season. This is make-or-break season. The market’s been pricing in perfection. Let’s see if these companies can actually deliver it.
