250th Birthday

This year, as we celebrate the 250th anniversary of our independence as a country, we are grateful for the sacrifices and vision that have brought us to our present day. It is humbling, inspiring and insightful to think about the many difficult decisions and actions that lead us to today. With complex history comes the responsibility of learning from our past to create an enlightened and intentional future. Just as we try to learn from our history as a country, we also try to learn from historical market cycles. This history gives us a frame of reference. Learning and understanding the market cycles we have previously experienced, we can gain some knowledge about how markets and investors may respond to changing dynamics, but we also know that no cycle repeats itself – meaning the factors that contributed to a previous cycle are complex, not singular.

The second quarter of 2026 we experienced just over a 15% return in the S&P 500, bringing us to a 9.6% year-to-date return for the index. Keeping in mind, we were making up for some lost ground from the first quarter of the year. The stock market has been relatively stable during a time of volatility in oil prices. Uncertainty regarding the Iran war created volatility in the markets in the first quarter of the year, but investors seem to be resilient to the wavering dynamics. The biggest impact has been added inflation due to higher energy prices. This caused the Federal Reserve to pause their rate-cutting cycle.  The added inflation has since subsided slightly, but the questions still linger - If inflation remains elevated, will the Fed be able to justify any additional rate cuts, and if the Iran war is not resolved will that keep energy prices elevated and potentially push the Fed to raise rates? 

Looking back on the last quarter, we can appreciate the positive return and the interesting changes that have taken place. We know there may be challenges we face in the future, but appreciating where we are in positive markets and reallocating to preserve profits will make for a smoother experience over time. We have seen ongoing interest in artificial intelligence, and new excitement over space technology. The SpaceX initial public offering (IPO) gave everyone some interesting news to follow, raising $75 billion and making it the largest IPO in history. We heard many of the jokes about the stock price ‘shooting to the moon’ and it has been interesting to watch the stock adjust over the last month. There are two possible additional IPOs this year that are likely to raise interest and news headlines – Anthropic and Open AI. Anthropic is known for its Claude AI assistant and Open AI is known for its ChatGPT chatbot. As excitement around artificial intelligence continues, so do rising concerns around a potential AI bubble. Our client portfolios have exposure to AI in a supportive and diversified way, allowing for participation but also protection if we see volatility in the future. 

As we look back on our quarter of a millennium as a country, it is amazing to think about what the next 250 years will bring. We have grown and adapted, and we continue to do so in this rapidly changing world. There will always be challenges that we will face, but through honoring our history, we remind ourselves where we have come from and how capable we are of navigating these complexities.  We hope you are enjoying these summer days. We look forward to hearing your thoughts and meeting with you again in the upcoming months. 

_{IMPORTANT DISCLOSURES:  The opinions presented in this communication are subject to change without notice and no representation is made concerning actual future performance of the markets or economy.  Information obtained from sources is considered reliable but is not verified.  The research and other information provided herein speak only as of its date.  We have not undertaken and will not undertake any duty to update the research or information or otherwise advise you of changes in the research or information.  Performance information presented is not an indication of future results and index data is provided for market reference purposes only.  This is not an offer to buy or sell or the solicitation of an offer to buy or sell any security/instrument or to participate in any particular trading strategy.  This document is the property of Legacy Financial Advisors and is intended solely for the use of the Legacy client, individual, or entity to which is addressed.  This document may not be reproduced in any manner or re-distributed by any means to any person without the express consent of Legacy.  This material is for educational purposes only.  Mis-transmission is not intended to waive confidentiality or privilege.}