HPWG Podcast July 2026: Markets Climb, Risks Evolve, and the Road Ahead

Todd:
Hello and welcome to the July edition of the Hoffman Private Wealth Group Podcast. I'm Todd Hoffman, Certified Portfolio Manager and CFP®, Founder and Managing Director at Hoffman Private Wealth Group at Steward Partners. Thanks for joining us today.

Jenna:
I'm Jenna Makras, a Wealth Advisor with the Hoffman Private Wealth Group. Hope your summer is off to a great start! We're at the halfway point of the year, and there's a lot to talk about — markets, the Fed, the Middle East, and a big birthday coming up this week.

Todd:
That’s right. But before we dive in — you know I can't resist a riddle.

"I have cities but no houses, mountains but no trees, and water but no fish. What am I?" Think about it for a second… The answer is: a map. And that's what today's episode is — a mid-year map. Where we've been, where things stand now, and where we're headed as we move into the second half of 2026.

Jenna:
Love it. So, Todd — it's been a wild ride. How has the market held up through the first six months?

Todd:
Honestly, better than a lot of people expected given everything going on. According to Factset the Dow and the S&P 500 are up a very respectable 9%, and Nasdaq is up 12.7% through the first half of the year, with most Developed International markets not far behind and the Russel US Small Cap and Emerging Markets International indexes leading, up around a whopping 22% increase.

The real driver of these great returns has been good earnings, with about 75 percent of S&P 500 companies beating expectations, led by Technology and Energy.

AI-related spending keeps accelerating, which has lifted everything from semiconductors to data centers to energy demand. A lot of that is right in the sweet spot of what we've been positioning in client portfolios. According to Gartner in May of 2026: Worldwide AI spending is forecasted to grow 47% to $2.59 trillion in 2026

Jenna:
Speaking of energy — the Middle East conflict has been a constant backdrop all year. Where do things stand now?

Todd:
It’s evolved quite a bit. What started as an acute shock early in the year has moved through multiple phases — escalation, partial ceasefires, followed by new flare-ups, then rinse and repeat. According to Reuters news, as of late June, the U.S. and Iran agreed to a 60-day diplomatic framework with talks being mediated in Switzerland, which is encouraging.

Saudi Arabia's Aramco just recently resumed shipping crude after a nearly four-month halt — also a positive sign. But it remains a fluid situation, and energy markets are still reacting to every headline.

On oil prices — Brent crude spiked in the mid-90s per barrel at the height of the conflict, but as the diplomatic situation has improved, it has pulled back again to the mid-70s, according to Factset. This has helped the markets as it mitigated concerns of higher inflation.

Jenna:
Let’s talk about the Fed. Kevin Warsh just had his first meeting as Chair. What happened?

Todd:
His first meeting told us a lot about the direction of policy. The FOMC Federal Reserve statement on June 17^th held rates steady between 3.5 to 3.75 percent.

What changed is the tone seems noticeably more hawkish with the removal of language suggesting future rate cuts, and adding updated projections now saying the median committee member expects a rate hike before year-end. According to CNBC, Nine of the nineteen participants are in that camp.

In June the Fed also raised its inflation forecast for the year from 2.7 to 3.6 percent. Clearly, energy prices from the Middle East conflict are making it very difficult to ease policy.

The Bottom Line: Interest Rate cuts are off the table for now, and a hike is a real possibility. As a result, we have shortened bond maturities to reduce sensitivity to that risk, but we have still been successful at maintaining attractive yields.

Jenna:
And how have client portfolios fared overall?

Todd:
Our tactical approach — moving into energy early when few wanted it, then rotating into beaten-down AI and technology names when they sold off — has generated meaningful outperformance versus our benchmarks across our portfolios. We also feel good about where our portfolios are positioned for a strong second half of the year!

We've also been active with tax-aware strategies throughout the year: tax-loss harvesting, tax swaps, reinvesting into similar but not identical positions to maintain exposure while capturing losses. When you have a year with strong gains, managing the tax side proactively matters just as much as the investment decisions themselves.

Jenna:
Todd, as we look ahead to the second half — what are you watching that might be different from the first half of the year?

Todd:
Great question, I am watching several critical and evolving areas for investment direction in the second half of the year.

First, AI is moving from hype to proof. The first half was about massive spending commitments and infrastructure buildout. The second half, I believe the markets are going to want to see stronger real earnings from all this infrastructure spending. According to RBC Capital Markets, more than half of enterprise companies now have AI in production, and 100 percent are allocating budget to it. That transition from pilot to production is a big deal.

Second, market leadership may broaden. The first half was heavily driven by a handful of mega-cap tech names. Several strategists are now pointing to small-caps, value-oriented sectors, and select international markets as potential outperformers in H2. In the couple of weeks, we have also seen a real pickup in healthcare stocks, namely Pharmaceuticals and Biotech. Im not chasing them, I believe this is just a shot term place traders are looking to buy some beaten up names on the cheap and when earnings start hitting, momentum will move back in tech and industrials.

Third, the Iran peace process is a genuine wildcard. If the 60-day framework holds and oil prices continue to ease, that would be a meaningful tailwind for inflation, for the consumer, and for the Fed's flexibility. If it falls apart, we could see another energy spike.

And fourth — earnings expectations for the back half of 2026 are quite high. Markets have priced in a lot of good news, which means less room for error. We're likely to see more volatility and more dispersion between winners and losers — this can be a very good environment for active, research-driven management like what we do.

Jenna:
So the message is stay engaged and stay nimble?

Todd:
Exactly. I believe the second half will be good, maybe not as strong as the first, but with good stock picking I think nimble investors will make money. It's about quality, discipline, and knowing what you own and why. We're focused on companies with durable earnings, real pricing power, and exposure to the structural themes we believe in — like AI infrastructure, industrials and areas where consumers with money like to spend it.

Jenna:
Now before we close, we have to acknowledge the big moment happening this week. July 4th, 2026, is America's 250th birthday. What does that mean to you, Todd?

Todd:
It really is something special. 250 years since the signing of the Declaration of Independence —The celebrations are extraordinary: with a massive Salute to America 250 on the National Mall, tall ships sailing into New York Harbor, and 50 states are hosting their own events. Another highlight is at the National Archives where there will be a dramatic reading of the Declaration of Independence only steps away from the original document. It's a moment worth taking pause to appreciate

Jenna:
It really does put everything in perspective — 250 years of this American experiment through wars, depressions, booms, and everything in between. What's the investing parallel?

Todd:
The same qualities that have made America remarkable — innovation, resilience, and the ability to adapt — this is exactly what has driven the long-term wealth creation in this country. Markets have survived two World Wars, the Great Depression, the dotcom bust, the financial crisis, a global pandemic — and come out stronger every time. If there's ever a moment to reflect on the power of long-term investing in America, it's the 250th birthday of our great country.

Jenna:
Well said. Happy 250th, America! And thank you all for listening to the July edition of the Hoffman Private Wealth Group Podcast. If you find this helpful, please share it with a friend or family member who might benefit from a thoughtful, grounded perspective on today's markets. We'll see you next month.

Todd:
We wish all our listeners a safe and fun holiday! We know it’s the dog days of the summer, but if you have questions, concerns, or there is anything at all we can help you with, we look forward to hearing from you. We also remind you if you have new money to invest, let’s keep buying any dips and a special thank you for all the new client referrals in the first half, we really appreciate it!

Jenna:
We wish you a Festive holiday and a Great second half of 2026. If you have found this Podcast interesting and informative, please forward it to a friend or family member.