Market OverviewAnd just like that, we’re back. After a very volatile first quarter with losses in the S&P 500 and international stocks, markets bounced back with huge gains in the last three months. The S&P 500 posted record highs amidst ongoing uncertainty in the conflict with Iran and negotiations over the potential end of events there. Ongoing enthusiasm about AI and tech stocks continue to drive market returns and valuations higher and higher.Just a few months ago I preached caution during a brief downturn and today I’m here to do the same while markets rally. We’ve seen huge gains, particularly in small cap stocks and emerging markets over 12 months. Again, forever, the message from here is the same: long term focus, not chasing returns or headlines or hot new strategies. Having a plan is only useful if we are sticking to it, and we are going to stick to it if we want to have any success. Maybe we’re up more from here in a few months, maybe not. Either way it doesn’t change the approach we’ll take.2Q 2026 1 Year 3 Year 5 YearLarge Cap US Stocks 15.20%22.32%20.61%13.41%Small Cap US Stocks19.70%37.50%16.05%7.37%International Equity10.04%19.44%16.50%8.69%EM Equity22.87%41.52%22.76%6.96%Aggregate Bonds0.80%3.94%4.35%0.45%Index performance is provided as a benchmark. It is not illustrative of any particular investment. An investment cannot be made in an index. Past performance is not an indication of future of results. S&P 500, S&P 600, MSCI EAFE Index, MSCI EM Index, S&P US Agg Bond Index. Returns as of 6/30/2026.Economic UpdateEconomic data remains mixed but in a fairly different vein than earlier this year. The job market is looking slightly better and economic growth has improved, but that has brought along with it higher interest rates and inflation. Real GDP growth saw a bump with the final number from the first quarter coming in at 2.1% from 0.5% in the previous quarter, with tracking data suggesting good numbers in 2Q 2026 as well. With the bump in economic activity and rising energy prices, inflation jumped in the first quarter, reporting a 4.2% year over year increase in CPI in May. Oil prices have begin to ease with hopes of the conflict in Iran coming to a close, but the ripple effects of energy costs across the economy will take more time to unwind. The most recent meeting minutes from the Federal Reserve Board made it clear that the primary concern going forward is inflation over what had been lackluster economic growth. It is unlikely that we would see further rate cuts in the current environment with many voting members making a move towards hikes to curb inflation if necessary. There were no changes to the Fed Funds rate in the second quarter.Long term interest rates, which are less influenced by the short-term rates set by the Fed and are more a result of inflation expectations in public markets, have responded in kind. 30-year mortgage rates moved higher off of recent lows.Housing has largely stalled in response to the current economic environment and stubbornly high (by recent standards) interest rates. The Case Shiller national home price index grew just 0.7% over the 12 months ending in May. The is the continuation of a trend now years in the making. We saw improving jobs numbers with the May jobs report showing a gain of 172,000 jobs, leaving the unemployment rate steady at 4.3%. Broadly the economy has improved in the last three months, but does come with some tradeoffs including more inflation and higher interest rates. Nothing super alarming, just a slightly different version of the middle we were in earlier this year.