Key Highlights

US equity markets closed out the second quarter of 2026 with some of their strongest performances in years, setting the stage for how individual stock momentum from Q2's biggest movers might carry into the third quarter. The S&P 500 rose more than 14% and the Nasdaq surged about 20% over the quarter, marking their strongest quarterly performances since the second quarter of 2020. The Dow Jones gained more than 12% over the same period, its best quarterly performance since the fourth quarter of 2022.

This broad-based strength was underpinned by a combination of resilient corporate earnings, continued artificial intelligence infrastructure investment, and a gradually improving inflation outlook that helped ease concerns about a potential Federal Reserve rate-hiking cycle. The quarter's final sessions saw the Dow Jones close at a record high of 52,319, capping the strong run with a fresh milestone.

Among individual stocks, names tied to the AI infrastructure investment theme carried particularly strong momentum into quarter-end. SanDisk Corp, AMD, and Vertiv Holdings, all of which posted significant single-session gains in the closing days of the quarter, enter the third quarter with considerable tailwinds, supported by strong forward guidance from semiconductor producers and continued elevated capital spending commitments from hyperscale cloud providers.

Meanwhile, laggards from the same period, including Honeywell International and the major telecom carriers AT&T and Verizon Communications, face a comparatively tougher setup heading into earnings season. These names will need to demonstrate clearer catalysts for improvement, whether through updated guidance, competitive repositioning, or broader sector tailwinds, to close the performance gap that emerged relative to the broader market during the quarter.

The Dow's strong quarterly performance, its best since Q4 2022, reflects a notable broadening of market gains beyond the technology-heavy Nasdaq, as easing inflation risk and steady oil prices supported more traditional, economically sensitive sectors alongside the continued AI-driven rally in growth stocks.

Looking into the third quarter, investors will be watching whether the momentum behind Q2's strongest performers can be sustained, particularly as upcoming earnings reports provide further clarity on whether the underlying demand trends driving the AI infrastructure investment theme remain as robust as the quarter's price action suggested.