Columbus Wealth Management Quarterly Update – 2026 Q2

Thank you for following our newsletter! Please be sure you are signed up to receive notifications any time we post by visiting this page (you will see a box at the top to sign up). As always, please don’t hesitate to reach out if you would like to discuss anything in this post!

Market Update & Investment Commentary

Data as of 06/30/2026 (unless stated otherwise)

U.S. Markets

After a difficult start to the year, markets rebounded sharply in the second quarter. As shown in the chart above, small caps, represented by the S&P 600, have moved from lagging in recent periods to leading the charge, with a year-to-date total return of 23.9%. In another reversal, large-cap value equities are now outperforming large-cap growth by nearly 11% so far this year. The Magnificent 7 – Apple, Amazon, Alphabet, Meta, Nvidia, Microsoft, and Tesla – went from accounting for 46% of the S&P 500 return in 2025 to just 1% so far in 2026. Diversified investors who were careful not to concentrate too heavily in large growth equities and technology stocks were rewarded this quarter.

The primary driver of the rebound was continued enthusiasm around artificial intelligence — particularly semiconductors, memory chips, data center infrastructure, cooling, and power generation. In other words, markets continued to reward not only the companies building AI models, but also the “pick-and-shovel” companies supporting the broader AI buildout.

International Markets

International equities also performed well during the quarter, though results varied significantly by region. Emerging markets were the strongest major equity category, with the MSCI Emerging Markets Index up approximately 24% year to date. Developed international markets, as measured by the MSCI EAFE Index, returned approximately 9.8% over the same period.

The strength in emerging markets was heavily influenced by semiconductor-related gains in Asia. South Korea and Taiwan were notable contributors, helped by enthusiasm around companies tied to AI, chips, electrical equipment, and related supply chains. While these returns were impressive, they also highlight the concentration risk that can exist within certain regional indexes. A relatively small number of companies can have an outsized impact on index-level returns, reinforcing the importance of broad diversification rather than chasing the strongest-performers.

Developed international markets also gained during the quarter, helped by easing Middle East tensions, improving economic momentum in Europe, and support from Japanese financials, exporters, and technology companies. However, developed international equities trailed U.S. equities during Q2 after outperforming in prior periods.

Economy

The U.S. economy continues to show resilience. The final estimate for Q1 GDP showed real GDP increased at a seasonally adjusted annualized rate of 1.6%. Growth has slowed from prior years, but current data still suggests the economy is expanding rather than contracting.

Inflation remains one of the most important variables for both markets and Federal Reserve policy. As shown in the first chart below, recent Consumer Price Index increases have been primarily due to rising energy costs. The year-over-year inflation rate was 4.2% in May. Core CPI, which excludes food and energy, was less impacted for the month and increased 2.9% over the prior year. Inflation remains above the Federal Reserve’s long-term 2% goal. The second chart provides more detail on oil and gas, highlighting that WTI crude has declined from a high of $114.58 in April to $70.56 on June 30. Lower oil prices helped move the average retail gas price down to $3.96 from a high of $4.62 in May.

The labor market is also cooling but remains relatively stable. Nonfarm payroll employment increased by 57,000 in June, and the unemployment rate was 4.2%. The labor force participation rate declined to 61.5%, and prior months’ payroll numbers were revised lower, suggesting that hiring has slowed meaningfully from the stronger pace seen in recent years.

At its June meeting, the Federal Reserve kept the federal funds target range unchanged at 3.50%–3.75%. The Fed’s statement emphasized that economic activity was expanding at a solid pace, productivity growth and capital investment remained strong, and inflation was still elevated relative to the Fed’s 2% goal. The tone of the meeting was more hawkish than at prior meetings.

Housing remains challenged by elevated mortgage rates. The national average 30-year fixed mortgage rate was approximately 6.49% on June 25, continuing to weigh on housing affordability and transaction activity. 

Sources: Freddie Mac, Federal Reserve, Bureau of Labor Statistics, and Bureau of Economic Analysis

Summary

The second quarter was a strong reminder of how quickly markets can recover after periods of volatility. Investors who reduced equity exposure during the first-quarter decline may have missed a significant portion of the rebound in April, May, and June.

That said, there are still risks worth monitoring. Inflation remains above the Fed’s target, the labor market is cooling, mortgage rates remain elevated, and geopolitical developments in the Middle East continue to influence energy prices and investor sentiment. Additionally, while AI-related investment continues to support corporate earnings and market enthusiasm, the sharp gains in some semiconductor and AI-related areas could lead to higher volatility if expectations become too optimistic.

Our core message remains the same: diversification, discipline, and a long-term focus are essential. Market leadership changes, volatility is normal, and short-term events often feel more important in the moment than they prove to be over time. We continue to believe that maintaining an appropriately diversified portfolio — aligned with your goals, time horizon, and risk tolerance — is the best way to participate in long-term growth while managing risk along the way. As always, your CWM advisor is available to review any questions or concerns.

Important Disclosure Information:

Past performance is no guarantee of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product, including the investments and/or investment strategies recommended or undertaken by Columbus Wealth Management (“CWM”), or any non-investment-related content made reference to directly or indirectly in this commentary, will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer reflect current opinions or positions. Moreover, you should not assume that any discussion or information contained in this commentary serves as the receipt of, or as a substitute for, personalized investment advice from CWM. CWM is neither a law firm nor a certified public accounting firm, and no portion of the commentary content should be construed as legal or accounting advice. A copy of our current written disclosure Brochure discussing our advisory services and fees remains available upon request or at www.cbuswm.com. Please remember: If you are a CWM client, please contact CWM, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing, evaluating, or revising our previous recommendations and/or services, or if you would like to impose, add, or modify any reasonable restrictions to our advisory services. Unless, and until, you notify us, in writing, to the contrary, we shall continue to provide services as we do currently. Please also remember to advise us if you have not been receiving account statements, at least quarterly, from the account custodian.

Historical performance results for investment indices, benchmarks, and/or categories have been provided for general informational and comparison purposes only and generally do not reflect the deduction of transaction and/or custodial charges, the deduction of an investment management fee, or the impact of taxes, the incurrence of which would have the effect of decreasing historical performance results. It should not be assumed that your CWM account holdings correspond directly to any comparative indices or categories. Please also note: (1) performance results do not reflect the impact of taxes; (2) comparative benchmarks/indices may be more or less volatile than your CWM accounts; and (3) a description of each comparative benchmark/index is available upon request.