Second Quarter 2026 Review

In our second quarter letter, we examine the forces supporting equities despite renewed geopolitical uncertainty and shifting interest-rate expectations. The letter highlights exceptionally strong corporate earnings, historically high profit margins, steady U.S. economic growth, improving labor-market data, and the reopening of capital markets—including the landmark SpaceX IPO.

We also consider the inflationary effects of higher energy prices, the Federal Reserve’s likely policy path, and why broadening earnings growth may provide a constructive foundation for the second half of the year.