US Stocks Set for Best Quarter Since 2021

US stocks are poised to finish the quarter with substantial gains, marking the best quarterly performance since 2021. This rise is attributed to declining geopolitical tensions and robust enthusiasm for technology and artificial intelligence.

What happened

The major indexes traded mostly flat on June 30, 2026, but the Dow Jones Industrial Average is on course for an 8% gain for the first half of the year. This gain would represent the index’s strongest performance in the first half since 2021. The Nasdaq 100 is projected to deliver an 18% gain, the best quarterly performance since the pandemic and its second-best quarter in nearly 25 years. The S&P 500 anticipates an 8% increase, while the small-cap Russell 2000 aims for a 21% rise, its best first half since 1991. Michael Hewson, a senior market analyst at iForex Europe, observed that the market has reversed course after a poor start to the year.

Why it matters

Investors are closely watching the economic landscape amid ongoing geopolitical risks and market volatility. Strong earnings reports have contributed to positive sentiment, with approximately 85% of firms in the S&P 500 surpassing earnings expectations. Analysts predict a 21% price increase for the S&P 500 over the next year, signaling potential future growth.

Background

On March 20, 2026, heightened geopolitical tensions regarding the US-Iran conflict caused major indexes to decline by nearly 10%. The market began to recover following a preliminary peace deal announced in June, contributing to the current stock market momentum.

What's next

Looking ahead, analysts expect ongoing market activity as corporate earnings reports for the second quarter are released. The weeks ahead will be crucial in determining whether the current rally can be sustained beyond this quarter.