By Silvano Grimaldi, CEO of Grimaldi & Partners AG.
Q2 2026 Review
International equity markets showed an overall positive trend in the second quarter despite elevated volatility. Robust corporate earnings, continued AI optimism and lower oil prices toward quarter-end were key support factors.
1. Recovery after the US-Iran war and lower oil prices
The US-Iran war and temporary concerns about disruptions in the Strait of Hormuz initially pushed energy prices higher and increased risk aversion. Toward quarter-end, progress in negotiations and falling oil prices provided relief.
2. AI and semiconductor stocks as the main drivers
Artificial intelligence, data centers and semiconductors remained at the center of market moves. The S&P 500 and Nasdaq reached new highs, supported by strong earnings reports and heavy investment in AI infrastructure.
3. Robust earnings stabilized US markets
Many companies defended margins and revenue better than expected. The US market benefited from solid earnings and resilient demand, while Europe remained more exposed to energy and trade risks.
4. Fed rate expectations turned more cautious
The US Federal Reserve kept rates unchanged in June but signaled a more restrictive stance because of resilient growth and inflation risks. Rising yields temporarily weighed on growth and technology stocks.
5. Swiss market showed defensive strength
The SMI benefited from its defensive structure and reached new highs in June. The SNB left its policy rate unchanged at 0% and signaled willingness to intervene in foreign-exchange markets to limit excessive Swiss franc appreciation.
Q3 2026 Outlook
Opportunities
1. Sustainable easing in the Middle East / lower oil prices
A lasting reopening of the Strait of Hormuz and lower oil prices would reduce inflation concerns, support consumption and margins, and further improve investors’ risk appetite.
2. Confirmation of earnings trends in the reporting season
If the Q2 reporting season confirms resilient revenue, stable margins and cautious but positive outlooks, equity valuations could remain well supported despite higher interest rates.
3. Broader market leadership beyond AI
A positive signal would be broader participation beyond AI and semiconductors, including industrials, healthcare, financials and defensive quality stocks. Better market breadth would make the rally more sustainable.
Risks
1. Renewed geopolitical risks
Fresh escalation in the Middle East, Ukraine or around Taiwan could again push oil prices, supply-chain risks and risk aversion sharply higher.
2. Higher US rates and rising yields
If the Fed becomes more restrictive because of inflation and a resilient labor market, higher yields could put renewed pressure on valuations, especially long-duration growth stocks.
3. Overheating in AI / earnings disappointments
Expectations for AI investment are very high. Disappointments in margins, cash flows or capital-expenditure plans could trigger a sharp correction in technology and semiconductor stocks.
Conclusion
Q3 2026 is likely to be driven primarily by the earnings season, Fed communication and oil-price developments.
Overall, we expect a slightly positive but volatile trend.
Stock in Focus
NVIDIA remains the key beneficiary of AI infrastructure
NVIDIA is one of the most important S&P 500 stocks in the AI cycle. The latest quarterly results confirmed exceptional demand for data-center chips, with revenue and the data-center business reaching new records. The stock remains volatile because expectations are high and investors are scrutinizing AI investment returns. Over the long term, NVIDIA’s market leadership, software ecosystem, networking and GPU platform, and strong hyperscaler demand remain compelling.
Stock in Focus: Nvidia
This publication is provided for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any financial instrument. Past performance is not indicative of future results.
