S&P 500, Nasdaq Post Strong First-Half Gains Before Q3 Pullback

U.S. equity benchmarks delivered their strongest first-half performance in years even as investors weighed persistent inflation pressures and shifting geopolitical signals. The S&P 500 advanced 9.6 percent from January through June 2026, while the Nasdaq rose 12.8 percent and the Dow Jones Industrial Average gained 8.9 percent, according to data cited by market participants. The Russell 2000 posted a 22 percent advance, its best opening half since 1991.

Those gains occurred alongside a $2 trillion increase in the combined market value of Micron, Intel and Advanced Micro Devices between April and June. Futures on the major indexes opened the third quarter lower, with S&P 500 contracts down 0.2 percent and Nasdaq 100 futures off 0.4 percent at the start of trading on July 1. Traders cited upcoming remarks by Federal Reserve Chairman Kevin Warsh at an ECB conference in Sintra, Portugal, as a near-term focus.

Market pricing reflected expectations that the Fed could raise borrowing costs further. Treasury yields were little changed after robust job-openings data reinforced arguments for tighter policy. Gold fell below $4,000 an ounce and the yen weakened to levels unseen in four decades. Brent crude futures slipped 0.78 percent after reports that President Trump told advisers he was comfortable extending Iran nuclear talks past an August 18 deadline.

Paul Hickey of Bespoke Investment Group said semiconductor stocks retain long-term appeal but appear extended after the first-half run. The economic calendar for July 1 included the ADP employment report, ISM manufacturing data and the final global PMI manufacturing reading.