Q2 2026 Market Update

A Rebound That Rewarded Patience

The first quarter of 2026 was hard on investors. Conflict in the Middle East pushed oil prices to nearly $120 per barrel, interest rates climbed, and worries about inflation returned. But in the second quarter, markets bounced back powerfully. As tensions with Iran eased and oil prices fell from their April peak, investor confidence returned, and money flowed back into stocks tied to artificial intelligence. Global stocks rose 14.9%, and the S&P 500 (an index of the 500 largest U.S. companies) gained 15.2%, reaching new all-time highs on the strongest corporate earnings in years.

The recovery was widespread. Smaller U.S. companies did even better than large ones, gaining 21.6%. European stocks rose 15.3%, Japanese stocks 14.2%, and stocks in developing countries jumped 24.1%, their best quarter since 2009. Bonds made money too: the broad U.S. bond market returned 0.7%, high-quality corporate bonds 1.4%, and high-yield bonds up 2.5%.

What This Meant for Geneva’s Target Date Funds

This quarter showed why Geneva’s custom-built, globally diversified Target Date Funds are designed the way they are. Funds for younger participants many years from retirement hold mostly stocks, so they captured the full benefit of the rally in U.S., international, and developing markets. Funds for participants near retirement hold more bonds, which kept them stable while their smaller stock holdings still captured part of the gains. Just as important, Geneva’s regular rebalancing (selling a bit of what has grown and buying what has lagged) kept every fund fully invested through the first quarter’s weakness, so participants were positioned to benefit when the recovery arrived.

The Value of Staying Invested

The first half of 2026 demonstrates the value of long-term investing. In March, the headlines gave investors every emotional reason to sell and move to cash. Yet within one quarter, global stocks had recovered and hit new highs. A participant who moved to cash after the first quarter would have locked in losses and missed a rebound of more than 15% in U.S. stocks. The same thing happened in 2025, when many retirement savers nationwide fled to safety during the spring sell-off and missed the recovery that followed. Timing the market means being right twice — knowing when to get out and when to get back in — and that is notoriously difficult.

Geneva’s Target Date Funds take that burden off participants. Each fund offers a mix of investments appropriate to your age, is professionally monitored, regularly rebalanced, and automatically becomes more conservative as retirement approaches. Uncertainty cannot be eliminated. Inflation, Federal Reserve policy, and world events remain open questions. But the past two quarters reaffirm a timeless principle of stewardship: it is time in the market, not timing the market, that builds retirement security.

Explore Geneva’s Fund Performance Reports online at genevabenefits.org/my-benefits.