U.S. stock futures retreated in the overnight session late Tuesday after the Dow posted its best first-half performance in five years, gaining 8.85% in the first six months of 2026. The decline followed a strong quarter despite the war with Iran, with the small-cap Russell 2000 posting its strongest H1 since 1991. Federal Reserve Chairman Kevin Warsh is scheduled to speak at the European Central Bank Forum on Central Banking on Wednesday, as markets brace for potential cues on inflation and the economy amid speculations of an interest rate hike later this year.
Dow Posts Best First-Half Performance in Five Years
The Dow posted its best first-half performance in five years, gaining 8.85% in the first six months of 2026. The S&P 500 and Nasdaq climbed 9.55% and 12.79%, respectively, for the same period. The Russell 2000, which tracks small-cap stocks in the U.S., surged 21.86% to clock its best first-half performance in two and a half decades.
For the quarter ended June, the S&P 500 gained 14.87%, while the Dow rose 12.9% and the Nasdaq jumped 21.41% in the same period. Economist Mohamed A. El-Erian stated in a post on X: "What a quarter for stock investors! Brushing aside war and other worries, the Nasdaq gained 21% and the S&P 15%, their largest quarterly returns in six years."
Tuesday's session marked the last trading day of the quarter and the first half of 2026. All three benchmark indexes closed higher, with the Nasdaq Composite leading the gains after adding nearly 400 points to close up 1.52%. The blue-chip Dow index gained 0.26% at close, while the S&P 500 jumped 0.79%.
Futures Decline in Overnight Trading
Dow futures were down 0.22%, S&P 500 futures fell 0.13%, and the Nasdaq 100 futures slumped 0.08% at 9:30 PM EDT. Among ETFs tracking benchmark indexes, the SPDR S&P 500 ETF (SPY), the Invesco QQQ Trust (QQQ) and the SPDR Dow Jones Industrial Average ETF Trust (DIA) were trading lower at the time of writing. The iShares 20+ Year Treasury Bond ETF (TLT) was trading down 0.68% amid 'neutral' sentiment.
Federal Reserve Chairman Warsh Scheduled to Speak Wednesday
Federal Reserve Chairman Kevin Warsh is scheduled to speak at the European Central Bank Forum on Central Banking on Wednesday. While Warsh is not expected to provide forward guidance in his address, investors will be watching for cues on inflation and the economy, especially amid speculations of an interest rate hike later this year.
Markets will also be watching out for the June non-farm payroll (NFP) report and the ISM Manufacturing PMI due later this week. U.S. stock and bond markets will be closed on Friday, July 3, in observance of Independence Day.
Technology and AI Stocks Drive Quarterly Performance
Technology stocks and AI trades dominated the three months, although sentiment dropped towards the end of June following hawkish signals from the Federal Reserve. According to a CNBC report, a blockbuster chip rally added about $2 trillion in combined market capitalization to Micron Technology Inc. (MU), Intel Corp. (INTC) and Advanced Micro Devices (AMD) in the second quarter of 2026.
Barclays analyst Anshul Gupta said in a note on Tuesday, as per the report: "The rotation out of AI hyperscalers into AI enablers has shifted investors' euphoria into semis, driving spectacular rallies."
On Tuesday, markets edged higher, partly buoyed by continued strength in chip stocks and technology shares. AI darling Nvidia Corp. (NVDA) rose more than 2.6% at close, while AMD rallied over 7% and INTC gained 6% at close.
U.S. Envoy and Kushner Meet Qatar Prime Minister in Doha
Reports suggest that U.S. envoy Steve Witkoff and Jared Kushner met Qatar's prime minister in Doha after President Donald Trump said Iran had requested talks. However, Tehran denied that any meeting with U.S. officials is currently scheduled, while discussions on Iran's frozen assets and the Strait of Hormuz continue.
Nike Shares Fall After-Hours on China Sales Decline
Shares of Nike Inc. (NKE) fell more than 3% in after-hours trading after the company reported a decline in China sales, overshadowing better-than-expected fourth-quarter (Q4) results. The company's net income jumped more than 400% while revenue came in at $10.97 billion, topping analyst expectations.
Bloom Energy and FuelCell Energy Rally on Partnership and Financing News
Bloom Energy Corp. (BE) shares surged more than 10% on Tuesday and continued to rally overnight after the company announced an expanded partnership with Brookfield for AI infrastructure buildout.
Fuelcell Energy Inc. (FCEL) continued its monster rally on Tuesday, jumping nearly 21% as investors turned optimistic over the company's $49 million financing package to support the deployment of five 2.8-megawatt (MW) energy blocks in South Korea.
MaxLinear Jumps on Data Center Business Confidence
Shares of MaxLinear Inc. (MXL) jumped more than 18% on confidence in its expanding data center business and long-term infrastructure growth strategy. Stifel recently raised its price target on MXL to $110 from $105 and reiterated a "Buy" rating.
Oil Prices Climb as Markets Watch U.S.-Iran Developments
Oil futures climbed higher in Tuesday's overnight trade as markets watch the U.S.-Iran developments closely. At the time of writing, Brent crude futures expiring in August were trading at around $72.92 per barrel. Meanwhile, WTI crude futures expiring in August gained about 0.6% to trade at $69.94 per barrel.
Yields on the 10-year Treasury were at 4.457% at the time of writing, while spot gold prices declined to around $3,978.70 an ounce.
Asian Markets Trade Mixed at Wednesday Open
Asian markets traded mixed at the open on Wednesday. South Korea's KOSPI and China's SSE Composite index declined at the time of writing, while Japan's Nikkei 225 edged higher. Meanwhile, Australian stocks were lower at the open.
FAQ
What was the Dow's performance in the first half of 2026?
The Dow posted its best first-half performance in five years, gaining 8.85% in the first six months of 2026.
When is Federal Reserve Chairman Kevin Warsh scheduled to speak?
Federal Reserve Chairman Kevin Warsh is scheduled to speak at the European Central Bank Forum on Central Banking on Wednesday.
Why did Nike shares fall in after-hours trading?
Nike shares fell more than 3% in after-hours trading after the company reported a decline in China sales, overshadowing better-than-expected fourth-quarter results.
