Market Commentary – Q2 2026

Stock Market Performance

The second quarter of 2026 delivered a powerful rebound across nearly every major equity market, more than reversing the trade-related declines of the first quarter. Canada advanced +7.95%, the United States surged +15.28%, and the broader World Index gained +14.11%. Europe added +11.79%, while Emerging Markets were the standout performer, climbing +24.22%, led by semiconductor and technology names in South Korea and Taiwan. Year-to-date, Emerging Markets now lead all major regions at +26.93%, with Canada at +11.47%, Europe at +10.84%, the World Index at +10.62%, and the US at +10.07%.

The quarter’s momentum was driven largely by AI and semiconductor names, as strong corporate earnings and continued heavy capital spending on AI infrastructure fueled one of the strongest quarterly advances for US equities in recent years.

Markets also absorbed a significant change in Federal Reserve leadership. Kevin Warsh was confirmed and sworn in as the new Fed Chair in May and struck a notably more hawkish tone than markets had expected at his first meeting in June, emphasizing the Fed’s commitment to bringing inflation back to its 2% target. Inflation remained stickier than hoped through the quarter, and market expectations shifted from anticipated rate cuts toward the possibility of a rate hike later in the year.

Gold and precious metals, after an extraordinary multi-year run, cooled meaningfully in the second quarter as investors rotated back into growth assets, posting one of their weakest quarters in over a decade. It is a reminder that no single asset class leads forever, and it reinforces the value of staying diversified across both asset classes and geographies.

After a difficult first quarter, this kind of sharp rebound is exactly why we counsel patience during periods of volatility. Investors who stayed invested through April’s uncertainty participated fully in one of the strongest quarters for global equities in years.

Staying Disciplined During a Rally

The evidence here is just as consistent as it is during declines. Investors who chase last quarter’s best performers tend to buy in after most of the gain has already happened, and they tend to arrive just as leadership rotates to something else. Gold’s pullback this quarter, after years of outperformance, is a good example of how quickly returns can change.

This is also a natural moment to rebalance. After a quarter where Emerging Markets rose 24% and Canada rose 8%, your portfolio’s actual mix has likely drifted away from its target weights, even though no one made a decision to change it. Rebalancing back to target is not a market call, it is simply keeping the risk in your portfolio consistent with your plan, and it has the added benefit of systematically trimming what has done well and adding to what has lagged.

A strong rally is also a good opportunity to top up your cash reserves. For clients drawing an income, we look at quarters like this one as a chance to harvest some of the recent equity gains and replenish your GIC and high-yield savings buffer, so that income continues to be funded from strength.

Mid-Year Portfolio and Planning Check-In

The midpoint of the year is a natural checkpoint, independent of what markets are doing. A few items worth reviewing with us over the coming months:

• Contribution room: Confirm your TFSA and RRSP contributions are on track for the year, and that you are not missing an opportunity to use available room while markets have been strong.
• Beneficiary designations: Life events, like a marriage, a death, a new grandchild can leave beneficiary designations on registered accounts and insurance policies out of date. This is worth a quick check at least once a year.
• Estate documents: If it has been several years since you last reviewed your will and powers of attorney, mid-year is a good time to confirm they still reflect your wishes. We would be happy to review these documents with you
• Rebalancing: As noted above, a quarter of this magnitude is a good prompt to review whether your portfolio mix still matches your target allocation.

What Does This Mean to You?

• Your investment portfolio is built to participate in periods like this one, with a well-diversified mix across geographies and sectors. The breadth of this quarter’s rally, led by Emerging Markets and US technology, benefited portfolios broadly.
• For those generating an income, we continue to maintain three years’ worth of income needs in GICs and high-yield savings accounts. We want to use growth to fund your income so we can wait and use the GICs for income when the inevitable stock market correction happens.
• For accounts that are accumulating and not taking an income, we are reviewing allocations to ensure the strong gains in certain sectors and regions have not left portfolios more concentrated than intended and rebalancing where appropriate.

As always, I thank you for the trust you place in myself, Diana and our firm. If you have any questions about your situation, please do not hesitate to contact us. We are always happy to talk with you by phone, by video, or in person.

Regards,

Cory Hill
Financial Advisor & Portfolio Manager