The second quarter of 2026 was a strong one for global equity markets, despite continued geopolitical uncertainty, shifting interest rate expectations, and plenty of headlines that could have given investors reasons to worry. U.S. stocks gained 15.44%, international developed markets returned 10.22%, and emerging markets led the way with a 24.05% return. Global real estate also posted solid gains, while bond markets delivered more modest positive returns.
U.S. Stocks Post Strong Gains
U.S. stocks finished the quarter firmly in positive territory. Small-cap stocks outperformed large caps, while growth stocks generally outpaced value stocks. Small growth stocks were the strongest-performing U.S. equity category, returning 25.71% for the quarter, compared with a 15.44% return for the broad U.S. market.
The quarter was another reminder that market leadership can change quickly. Investors who maintained exposure across company sizes and investment styles were positioned to participate as returns broadened beyond the largest companies in the market.
Emerging Markets Lead International Returns
International markets also delivered positive results. Developed markets outside the U.S. gained 10.22%, with growth outperforming value and large caps outperforming small caps.
Emerging markets were the quarter’s strongest major equity category, returning 24.05%. Emerging market growth stocks gained 26.45%, while the broad emerging markets index posted a one-year return of 43.51% through June 30.
The wide range of returns across countries and regions reinforced the potential value of global diversification. No single market consistently leads, and maintaining exposure to markets around the world can help investors participate when leadership shifts.
REITs Rise While Commodities Struggle
Real estate investment trusts had a strong quarter. U.S. REITs returned 12.37%, outperforming global REITs outside the U.S., which gained 7.23%.
Commodities moved in the opposite direction. The Bloomberg Commodity Total Return Index declined 8.08% for the quarter. Results varied significantly among individual commodities, with cocoa gaining 48.32%, while silver fell 20.45% and WTI crude oil declined 19.12%.
Bonds Deliver Positive Returns as Interest Rates Rise
Bond markets posted modest positive returns during the quarter. The U.S. bond market gained 0.67%, while the global bond market outside the U.S. returned 1.77%.
U.S. Treasury yields generally moved higher, with the 10-year Treasury yield ending the quarter at 4.44%. Municipal bonds were among the stronger areas of the fixed-income market, returning 2.50% for the quarter, while high-yield corporate bonds gained 2.47%.
Keeping the Quarter in Perspective
Perhaps the most important takeaway from the quarter is that strong market returns rarely arrive in a straight line. Investors faced geopolitical conflict, inflation concerns, changing interest rate expectations, and sharp swings in stock prices. Yet global equity markets still finished the quarter with substantial gains.
The S&P 500 experienced a 2.63% decline on June 5, one of its worst daily returns of the past 30 years. Even after that decline, the index remained up 8.4% for the year through that date. The lesson is not that volatility should be ignored, but that short-term market movements are best viewed within the context of a long-term investment plan.
Markets will continue to deliver unexpected headlines, changing leadership, and periods of uncertainty. Maintaining a diversified portfolio, staying disciplined, and resisting the temptation to make investment decisions based on short-term news can help investors remain focused on the goals their portfolios are designed to support.
