Investing Update: 1st Half Recap & 2nd Half Outlook
What I'm buying, selling & watching
The S&P 500 closed the week at 7,483, up 1.7%, and is now up 9.3% on the year. The Dow gained 1.9% on the week, up 10.1% YTD. Nasdaq was the outlier, down 1.9% on the week despite still leading with an 11.2% YTD gain. Russell 2000 dipped 0.4% but remains the best performing major index this year at 19.8%.
The 10-year Treasury yield rose 2.1% to 4.49%. Oil slipped 0.7% to $68.78, still up 18.7% YTD. Gold jumped 2.7% to $4,187 but remains down 4.2% on the year. Bitcoin had its best week in a while, up 4.3% to $62,699, though it’s still down 28.4% YTD.
Market Recap
Weekly Heat Map Of Stocks
Sentiment Check
July Seasonality
If you like green, you love July. It’s historically the best performing month of the year for the S&P 500. Since 2005, the index has averaged a 2.5% gain in July, more than four times the average return of the other 11 months combined.
Even better: July hasn’t posted a loss in 11 straight years, the longest positive streak of any month over that stretch.
Can it make it 12 in a row?
1st Half Recap
The first half was stronger than most investors realize.
S&P 500: +9.5% (best first half since 2024)
Q2: +14.9% (best quarter since the 2020 rebound)
Nasdaq: +12.8%
Dow: +8.9% (best first half since 2021)
Russell 2000: +21.9% (best first half since 1991)
This wasn’t just another AI rally. By the end of June, participation had broadened well past mega-cap tech, and the Russell 2000 was the real story of the half.
This next chart backs up what the index returns already told you. Small caps beat large caps by 12.3 percentage points in the first half, the widest first half spread since 2005. After years of large caps running away with everything, small caps finally showed up.
Here’s the industry breakdown. Semiconductors were the best performing industry in the market, up 94% YTD. Computer Hardware gained 74%. Telecom gained 49%. On the other end, Software and Service was the only major industry to finish the half in the red, down 8.3%, even after bouncing 20.6% in Q2.
This S&P 500 heat map shows exactly where the money went and where it didn't in the first half.
Here are the best performing S&P 500 stocks. SanDisk is the runaway winner, up 857%. Corning is the only name in the top 10 that isn’t a pure chip or storage play, and even that’s an AI data center bet. Nine of the top 10 best stocks in the entire S&P 500 make the physical infrastructure for AI.
These are the worst performing S&P 500 stocks. Intuit is the worst, down 61%. Accenture and Cognizant losing half their value is the market saying it thinks AI is coming for consulting headcount.
Here’s the Dow sorted by return. Caterpillar led the entire index, up 67.59%. Cisco gained 45.78%. UnitedHealth, last year’s Dow disaster, actually gained 28.52% in a real rebound. On the other end, Salesforce was the worst Dow stock, down 37.37%. Nike was next worst, down 31.22%, and Microsoft finished down 19.58%.
Here’s the view from outside the US. South Korea was the best market in the world, up 118.61%. Taiwan gained 62.38%. The US, at 9.88%, was actually below the global average. Indonesia was the worst market in the world, down 41.49%, followed by China and India. If you only watched US headlines this year, you missed one of the wildest global divergences in a long time.
Last is my favorite chart, the asset class total returns table. Small caps led all major asset classes in the first half, up 22.6%. Convertible bonds, the Nasdaq 100, and commodities all followed close behind. Bitcoin and gold were the worst performing major assets in the first half, down 31.4% and 7.0% respectively, after gold’s monster 63.7% run last year. 90% of asset classes finished the half positive. I love this table because it’s the fastest way to see the entire market’s story in one screen.
That's the recap. Now the part that actually matters, how I did against all of it, and where I think this market goes from here.