Although underlying trends remained positive, higher oil prices continued to weigh on markets in July. The Nasdaq was the worst-performing U.S. index, while the S&P 500 and Dow Jones Industrial Average were flat for the month. Turning to the economy, the data was mixed, but strength in consumer spending and non-residential fixed investment is an encouraging sign that the economy is poised to continue growing in the second half of the year.

The first half of 2026 was shaped by market-moving headlines. The conflict in the Middle East was the most significant story, triggering a short-term market sell-off. But investors also focused on the Supreme Court’s decision that the mechanism by which the Trump administration implemented last year’s tariffs was illegal, increased scrutiny on AI infrastructure spending and the ability to earn a return on it, and a transition of Fed leadership from Jerome Powell to Kevin Warsh.

Midterm elections. A change of leadership at the Fed. The shifting AI theme. There's a lot for investors to think about as we move into the second half of the year. To help navigate the path ahead for markets and the economy, Sam and I welcomed a special guest to this month's Market Observatory, Marc Zabicki, LPL's chief investment officer.

June was a mixed month for markets, as equities were dragged down by the Magnificent Seven stocks, which all closed lower on the month. Still, the Dow Jones Industrial Average and the small-cap Russell 2000 both rallied, and the market benefited from the increasing earnings expectations for corporate America. Further, the May jobs data came in well above economist expectations, and retail sales continue to show consumers are willing to spend. But will inflation remain a fly in the ointment?

The 2026 FIFA World Cup is in full swing. It will include 104 games played in 16 stadiums, 11 of which are in major U.S. cities. But here's the big question for investors: Will the World Cup be a win for the U.S. economy?

May was a strong month for equities, despite geopolitical tensions and inflation concerns. Major indices reached record highs, supported by robust corporate earnings that were significantly beyond expectations. Gains broadened beyond large tech firms, signaling healthier market participation. While bonds experienced mid-month volatility due to inflation fears, they recovered as geopolitical tensions eased. Economic data showed mixed but generally positive trends, including steady job growth and resilient consumer spending.

Despite the ongoing conflict in the Middle East and rising oil prices, stock markets have reached all-time highs. It seems investors have been able to look past the short-term noise and focus on the fundamentals. But are there other risks on the horizon?

In April, the S&P 500, Dow, and Nasdaq all surged, driven by earnings growth and a risk-on sentiment for investors. Further, the economic updates released during the month were largely positive. The initial estimate of Q1 GDP growth came in at 2 percent annualized, up from 0.5 percent at the end of last year. The economy also added a solid 178,000 jobs in March, the strongest month of hiring in over a year. On the consumer front, we saw signs of stabilizing sentiment and solid spending growth.

Stocks have been on a bit of a rollercoaster over the past two months. If your nature is to tune out the noise and check in occasionally, you might have missed it. After a 9 percent sell-off earlier in the year, markets quickly rebounded and have recently traded at all-time highs.

As we enter the second month of the conflict in the Middle East, what impacts are we seeing on the markets and economy? In this month's episode of the Market Observatory, Sam and I look beyond the headlines and focus on the fundamentals. From corporate earnings to rising inflation to recent jobs data, a balance of headwinds and tailwinds has started to emerge for investors.