Market Pulse

July was a month of two very different stories playing out under one roof. The Dow and S&P 500 eked out gains of 0.3% and 0.5% respectively. The Nasdaq was the clear laggard, falling more than 3% for its worst month since March 2025. A sharp sell-off in semiconductor and AI-related stocks dragged the tech-heavy index lower even as the broader market held its ground.

Behind the market moves, the economic data was mixed. The estimate for second-quarter GDP came in at 1.5%, a step down from the first quarter’s 2.1% pace and the July jobs  report unexpectedly contracted by 23,000, far short of the roughly 83,000 gain Wall Street had penciled in. On the brighter side, July’s inflation report showed headline CPI cooling  to 3.4% year-over-year (from 3.5% in June) and consumer spending accelerated.

So far for August, the combination of a weak jobs report and cooler inflation reduced the odds of a Fed rate hike, and stocks took off. The S&P 500 crossed 7,800 for the first time ever in mid-August, and the Nasdaq notched its own record close, powered by a bounce-back in chip stocks.

Even the dog days of August can turn on a dime. That said, the back half of the month has been choppier. A weak July retail sales report, a sharp drop in consumer sentiment and  renewed friction between the U.S. and Iran over the Strait of Hormuz have all weighed on stocks over the past week.

As summer vacations wind down and school desks fill back up, the calendar itself becomes a factor worth watching. Historically speaking, August and September have long been the market’s weakest two-month stretch. Since 1950, the S&P 500 has averaged a flat return in August and a loss of about 0.7% to 1% in September. Layer on top of that the fact that 2026 is a midterm election year which has historically delivered the lowest average returns of the four-year presidential cycle.

However, using the same historical time frame, the S&P 500 has finished August and September in negative territory 17 times. Yet, in 16 of those instances, the index turned higher again in the fourth quarter. Going one step further, in the 12 months following every midterm election since 1962, the S&P 500 has posted a gain, averaging better than 14%, as post-election policy clarity and reduced uncertainty have historically been a tailwind.

We’re in a seasonally soft and choppy stretch, and despite the impending barrage of negative political ads and phone calls on the horizon, we see opportunities in healthcare, homebuilders, and utility stocks.  All three have lagged the broader market this year but appear poised to find some footing and may be poised to move higher. 

We’ll continue to monitor progress on two fronts in particular: the Federal Reserve, whose July split vote leaves real ambiguity about the path of rates into year-end, and the situation in the Middle East, where developments around the Strait of Hormuz remain the single biggest swing factor for oil prices and inflation. As a result, the remainder of the summer will be more about sunscreen than swimming – protecting the portfolio from getting sunburned by a headline or two, rather than chasing every wave that rolls through.

What The Lottery and Life in Retirement Have in Common

I was recently asked by a few media outlets to offer advice on what someone should  consider doing after winning a massive Powerball jackpot. It’s a fun topic because nearly everyone has wondered: What would I do if I won?

Common responses can include quitting your job… buying an exotic car or dream home… traveling all over the world… helping your children and grandchildren… and giving some money away to your favorite charities.

There are plenty of practical things to consider, such as paying taxes, setting up trusts, selecting and managing investments, and insurance. While the odds of winning the lottery are extremely low, everyday investors can learn about managing their investments and their lives in retirement from strategies normally reserved for the ultra-lucky.

Money is Funny: If there is one thing I have seen in over 25 years of financial and retirement planning, it’s that money can be truly disruptive to families. One of the biggest mistakes people make after a major windfall is handing out cash to help family members who are struggling financially. The issue is that when cash is provided without any structure or framework, the handouts can become regular expectations and cause resentment when they stop. 

Instead, structuring help as a long-term loan, even if you never intend to collect, sets  different expectations than an outright gift. Likewise, if a family member needs help    paying down debt or something like a new washer and dryer, consider paying the family member’s credit card company directly or buying the item yourself. This ensures the money goes where it’s meant to be, rather than simply putting cash in their hands to allocate on their own.

Make Gifting Relational Not Transactional: In some cases, parents and grandparents may want to share their wealth with family as a cash gift. For 2026, the annual gift exclusion is $19,000 per person. Generally, a married couple can give up to $38,000 per recipient.

Most family gifts may not be that large or occur annually, but rather than simply handing over a check, consider including an experience. Book a family weekend away or vacation somewhere special. This creates time to connect and can make the gift feel more relational than transactional. 

Passing On Wisdom With Wealth: At some point, we retire from our time here on earth and assets must be passed on to future generations. We all know the importance    of updating wills, trusts, and beneficiary designations to pass on wealth. But it’s less common and equally important to pass on your wisdom as well. After all, wisdom can maintain and even grow wealth, but wealth alone will not produce wisdom. 

So there is a more personal side to legacy planning that we encourage clients to consider. It’s called a Legacy Notebook and is designed to help you begin to write down parts of your story and the wisdom you’ve collected so far in life. If you would like a PDF copy of our own Legacy Notebook, or a physical copy, please let us know by email or a phone call.