Straight From Stern - June 2026
- sstern34
- Jun 3
- 4 min read
From the Desk of Steve Stern, CFP®
2026 is nearly halfway over and we are wrapping school and getting ready for camp season. We're excited to spend time outdoors, grilling and playing sports. Ryleigh is finishing 2nd grade and is turning into such a well rounded student. She just had her 2nd piano recital and is loving softball. My wife played catcher at Mary Washington University so it looks like we're going to be playing softball for many years to come. Cole is excited to start Kindergarten in the fall and is finishing his first year playing T-ball.
As the Iran war lingers on and uncertainty continues around the Strait of Hormuz, oil prices, and more, the market remains focused on the unprecedented spending on the artificial intelligence buildout and the upcoming mega IPO's from SpaceX, OpenAI and Anthropic. Let's discuss!
Market Performance — May
Source: StockAnalysis.com, verified June 3, 2026
Key Benchmarks: S&P 500: 7,609.78 | 10-Yr Treasury: 4.49% | Fed Funds Rate: N/A
May's Winner: Emerging Markets
Emerging Markets led all asset classes in May 2026 with a return of +7.20%. On a year-to-date basis, Commodities leads all asset classes at +30.10%. The emerging markets rally was driven by improving risk sentiment and renewed optimism around China's economic stimulus measures, while investors also began pricing in expectations that the global interest rate tightening cycle may finally be stabilizing. This rotation back into higher-growth assets reflects a broader easing of recession concerns—exactly the kind of environment where emerging market equities historically thrive.
May's Laggard: Commodities
Commodities was the laggard in May 2026 with a return of -4.05%. Year-to-date, Bonds trails at -1.20%. May's commodity weakness reflected a stronger US dollar and moderating demand concerns as inflation data showed meaningful cooling, prompting some investors to trim cyclical exposure. Yet this is precisely where patience and long-term perspective matter: commodity cycles are measured in years, not months, and short-term price volatility often reflects temporary supply or demand imbalances rather than fundamental value shifts.
What We're Watching
The Mega-IPO Wave and Market Volatility Ahead: SpaceX's anticipated public offering is expected to raise $75–$80 billion at a valuation up to $1.8 trillion, with OpenAI and Anthropic following shortly after. These are transformational offerings that will inject massive liquidity into the market—but they'll also bring meaningful disruption. The sheer supply of new shares hitting the market, combined with recent rule changes around how companies get added to major indexes, could introduce significant volatility in the months ahead. For your portfolio, this means we should expect choppiness even if the long-term picture remains constructive.
A Potentially Hawkish Fed at a Volatile Moment: Kevin Warsh's first meeting as Fed chair is shaping up as more hawkish than many expected, with early signals pointing toward rate increases rather than the rate cuts the market had priced in. Layered on top of a contentious election cycle, we could be looking at a volatile fall. The combination of mega-IPO disruption, shifting rate expectations, and election uncertainty creates a perfect storm of moving parts. This is exactly when disciplined diversification and a long-term perspective matter most—your plan accounts for volatility because volatility is always part of the journey.
Broadening Leadership Beyond the Mega-Cap Giants: While technology and mega-cap growth stocks have dominated headlines, recent market breadth shows expanding participation from Healthcare Services, Aerospace & Defense, and equal-weighted indices. This broadening of leadership is genuinely healthy for the market, because it means gains are no longer precariously dependent on a handful of names. For your diversified portfolio, this suggests equity returns can be distributed across multiple areas rather than concentrated in a few mega-cap winners—a pattern that typically produces more durable rallies and reduces the risk that weakness in any single sector derails the entire advance.
Earnings Momentum Providing a Solid Foundation: The stock market's advance is being fueled by genuine corporate earnings momentum rather than speculative P/E expansion. Q1 earnings performance across sectors has been robust, which is a more sustainable foundation for gains than sentiment-driven rallies. When stocks rise on the back of actual business results, those gains tend to have more staying power. However, certain sectors like Consumer Staples have become stretched relative to earnings growth, suggesting the market has priced in significant optimism in some corners—another reason diversification across sectors remains prudent.
Client Spotlight
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For more information visit: www.theawardcoach.com or contact info@theawardcoach.com
As always, if you are concerned or just want to have a conversation with a friendly human, call Steve at 443-812-5459 or email him to set up a meeting at sstern@abel-financial.com. You can also use our “Schedule a Meeting” link below.
Warmly,
Steve Stern, CFP®
Abel Financial | sstern@abel-financial.com
Disclaimer: This newsletter is for informational purposes only and does not constitute investment advice. Past performance is not indicative of future results. Please consult with a qualified financial advisor before making investment decisions.
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