We just closed the books on the first half of 2026, and it’s been a busier six months than most of us expected. This week brought Fed Chair Kevin Warsh’s first appearance on the world stage, fresh readings on manufacturing and consumer confidence, and this morning’s jobs report, which arrived a day early because markets are closed for the holiday tomorrow. Here’s what stood out.
- Fed Chair Warsh makes his global debut: On Wednesday, Kevin Warsh took the stage in Sintra, Portugal for his first international appearance as Fed Chair. He was joined by the heads of the European, British, and Canadian central banks for a panel discussion. Warsh said inflation is still “too high” but stopped short of hinting at what the Fed will do at its next meeting. He also joined his fellow central bankers in saying they’d rather let economic data speak for itself than make promises about where interest rates are headed next.
- Manufacturing keeps growing, just a bit slower: The ISM Manufacturing survey came in at 53.3% for June, a slight step down from May’s 54%, but still comfortably in growth territory. This marks the sixth straight month of expansion for the manufacturing sector and the 20th straight month of overall economic growth by this measure. A good sign that the industrial side of the economy is holding up.
- Consumers feel a little better, but job worries persist: The Conference Board’s Consumer Confidence Index rose slightly to 91.2 in June, up from a revised 90.6 in May. Falling gas prices helped ease some inflation worries, and people felt a bit more optimistic about where the economy is headed. That said, more people said jobs are “hard to get” than at any point in over five years, showing confidence in the labor market itself is still shaky even as the broader mood improves.
- Hiring cools off in June: This morning’s jobs report showed employers added just 57,000 jobs in June, well short of what economists were expecting, while the unemployment rate ticked down slightly to 4.2%. Growth was concentrated in professional and business services, health care, and social assistance, while leisure and hospitality lost jobs. On top of that, hiring in April and May was revised lower by a combined 74,000 jobs. Taken together, it’s a clear signal that the labor market is cooling faster than it has been, and it will likely be a talking point for the Fed as they weigh their next move.
- Six months in the books: Looking back at the first half of 2026, it’s been a stronger year than many anticipated. The S&P 500 gained 9.6%, its best first half since 2021, while the Nasdaq climbed 12.8% and the Dow added 8.9%. Smaller companies did even better, with the Russell 2000 surging nearly 22% for its best first half since 1991. Technology and AI-related companies led much of the way, even after working through real bouts of volatility tied to the conflict in the Middle East and a leadership change at the Fed. It’s a good reminder that markets can climb a wall of worry, and that staying invested through the noise has, once again, paid off.
Looking Ahead
Remember that markets will be closed tomorrow in observance of Independence Day. With today’s softer jobs numbers now in hand, we’ll be watching how the Fed weighs this alongside inflation as they head toward their next meeting. As we move further into the second half of 2026, we’ll also be watching for the kickoff of second-quarter earnings season later this month for a read on how corporate America is holding up.
Interesting to Note
With the 4th of July falling on a Saturday this year, many of us will be taking Friday to stretch the holiday into a long weekend. Whatever your plans, we hope you have a good time outdoors (In the shade!!), around the grill, or with family and friends celebrating the holiday. Our office will be closed Friday, July 3rd, and we’ll be back to normal hours on Monday.
Wishing you and your family a safe and happy Independence Day.
Written by: Chris Wasson, CFP®
Sources:
U.S. Bureau of Labor Statistics
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