Quarterly Update - July 2026

Q1 Market Review: A Powerful Rebound

The second quarter of 2026 brought a sharp and welcome reversal from the turbulent, volatile start of the year. After a rocky first quarter weighed down by geopolitical tensions in the Middle East and spiking energy prices, the markets delivered a powerful advance. In fact, we just witnessed one of the strongest quarters for equities since the post-COVID market recovery in 2020.

The primary catalyst for this massive rebound was an exceptional corporate earnings season. As we alluded to in last quarter’s commentary, “over time it’s earnings that drive stock prices and future earnings projections look very strong.” As it turned out, profits for Corporate America grew at a staggering 28.8% year-over-year, proving that the fundamental engine of the stock market remains highly robust. Furthermore, an apparent ceasefire (that ended up being temporary) in Iran helped ease immediate geopolitical anxieties, leading to a plunge in oil prices back toward pre-crisis levels and taking substantial pressure off global economic growth.

With these twin tailwinds, major stock indices surged:

• The S&P 500 climbed over 15% for the three-month period.

• The Nasdaq Composite rocketed over 21%, fueled by a resumption of the massive AI and semiconductor infrastructure trade.

• The Dow Jones Industrial Average added close to 13%.

• International Stocks (MSCI World Ex-US Index) also rebounded strongly, posting gains of approximately 10%.

Importantly, this rally began to broaden out. Unlike previous quarters where a handful of tech giants did all the heavy lifting, Q2 saw widespread participation across small caps, value stocks, and cyclical sectors like industrials and financials. Diversification again proved its worth.

In fixed income, bonds remained relatively flat for the second consecutive quarter. While falling oil prices offered some relief from peak inflation worries, inflation remains sticky. The Federal Reserve, under new Chair Kevin Warsh, continues to signal a highly cautious approach, and the market is currently pricing in the potential for further rate hikes later this year to ensure inflation is fully contained. As a result, we continue to view short-term fixed income and cash as valuable components of a balanced portfolio rather than just placeholders.

Now Live: Trump Accounts

We are excited to share a major legislative update that is now officially live and ready for our clients. Following the rollout of the One Big Beautiful Bill Act, Trump Accounts (530A IRAs) are now active and ready to be utilized.

These are brand-new, tax-advantaged investment vehicles specifically designed to give children under the age of 18 a head start on long-term retirement savings and financial security.

Here are the key details of how these accounts work:

• Government Seed Money: Eligible children born between January 1, 2025, and December 31, 2028, will receive a one-time $1,000 contribution directly from the U.S. Treasury to kickstart the account.

• Tax-Deferred Growth: Contributions are made with after-tax dollars, meaning they grow entirely tax-deferred. At age 18, the account automatically converts into a Traditional IRA.

• Flexible Funding: Families can contribute up to $5,000 annually per child. Additionally, qualified employer matching programs allow employers to contribute up to $2,500 tax-free (which counts toward the $5,000 annual limit).

• Strict Preservation: To maximize the power of long-term compounding, funds are generally completely restricted and cannot be distributed during the "growth period" before the child turns 18.

Because investments in these accounts are currently restricted by law to low-cost U.S. equity index funds, they represent an incredibly efficient, low-fee way to build generational wealth. If you have children or grandchildren who qualify, please reach out to us. We can help you navigate the enrollment process and integrate this tool into your family’s broader wealth plan. Be on the lookout for a more detailed communication on Trump Accounts from us in the coming days.

Looking Ahead

As we transition into the second half of 2026, the underlying economic backdrop remains constructive, underpinned by resilient consumer spending and robust corporate earnings. However, we remain disciplined. September and October are historically volatile months for the stock market, and this seasonal pattern is likely to be amplified by the upcoming congressional mid-term elections on November 3rd.

Elections and policy shifts inject short-term noise into the market, but history shows that sticking to a well-diversified, long-term allocation is the surest path to success. Our focus remains on managing downside risk, rebalancing as opportunities arise, and keeping your capital aligned with your personal goals.

In the Community

Luke and Ryan were thrilled to participate again as chefs in the annual Cookin’ Fort Wayne event, hosted by the Do-It-Best Foundation. The event brought together community and business leaders to raise funds for Ronald McDonald House of Northern Indiana, a cause close to our hearts and one Luke supports as a board member.

Thank you for your ongoing partnership, trust, and confidence. We are honored to stand in the arena with you.

The content provided by Arena Wealth Management LLC is for informational purposes only and should not be construed as personalized investment advice. Investing involves risk, and there is no guarantee that any strategy or historical trend will result in future profits. Any opinions expressed are those of the authors and are subject to change at any time. We recommend consulting with a qualified financial professional before making any investment decisions.