What's Ahead In The Second Half for Markets?

Editor’s note: We asked a group of leading Pittsburgh-area wealth managers to give their answers to this question: “So far, 2026 has been treacherous for investors. What do you expect for the second half and where do you see opportunity?”

DAMIAN MCINTYRE, FEDERATED HERMES Investor outlook in 2026 has been shaken repeatedly by conflicts and war in the Middle East, visible stresses in private credit and the AI disruption in software. With Iran, an end to the conflict is in the economic and political interests of both that country and the United States. Prolonged conflicts in the Middle East risk higher gasoline prices and a deeper equity drawdown. While the news may appear grim at times, we recommend that investors stay disciplined and wait out any storms. Market pullbacks should present opportunities to add risk selectively. This underpins our year-end S&P 500 target of 7,500.

BETH GENTER, SCHENLEY CAPITAL The first quarter of 2026 brought heightened market volatility, and we expect this to persist through year-end. Recent geopolitical developments — including ongoing Middle East conflict, leadership change in Venezuela, and strategic focus on Greenland’s mineral resources — have contributed to the disruption and uncertainty. These dynamics highlight the growing importance of reliable energy and infrastructure to support AI-driven data center expansion and global chip production. In this environment, our disciplined, long-term approach remains essential. We continue to identify attractive opportunities, in electric utilities and infrastructure sectors, which we believe are foundational to meeting rising energy demand and enabling the next phase of technological growth.

OLU OMODUNBI, HUNTINGTON NATIONAL BANK The second half of 2026 could shape up better than the first, though not without challenges and periodic volatility tied to inflation trends, interest rate policy, and AI growth concerns. Importantly, earnings growth expectations remain sound, and we believe they ultimately can be realized as fundamentals continue to be strong. The difficult start to markets in 2026 has also reset valuations to more reasonable levels, improving the prospective return backdrop. Finally, the sector rotation seen early in 2026 has highlighted broader market depth than many expected, creating opportunities across both U.S. and non-U.S. equities for disciplined, long-term investors.

WIN SMATHERS, SHOREBRIDGE WEALTH MANAGEMENT The first half of 2026 hasn’t been notably treacherous, but volatility spiked after the war with Iran began in February. Markets finally turned positive as a temporary ceasefire opened the door to negotiations, raising hopes for a quick resolution and the reopening of the Strait of Hormuz. Even before the conflict, investors were rotating out of the Magnificent Seven and into durable sectors, immune to AI disruption — energy, mining, utilities, staples — while bonds weakened as rates rose on inflation concerns. Despite the turbulence, U.S. fundamentals remain strong: solid corporate earnings, low unemployment, and pro-growth tax changes from last year’s OBBB legislation. Looking ahead, I see opportunities in a tech rebound, financials, non-U.S. equities, and the pick-and-shovel infrastructure supporting data center expansion.

BRIAN TARQUINIO, THE WTL GROUP, MORGAN STANLEY We think that 2026, despite all the volatility to date, could potentially deliver roughly 10% upside for the S&P 500. With all that’s happened so far this year, we’d be more than happy with an “average” annual return in the markets. We’re moving capital back to the U.S. from abroad, adding to companies with strong balance sheets and pricing power — the sorts of companies that could weather a potential stagflationary environment from elevated commodity prices and higher interest rates. We’re also selectively using infrastructure investments as a hedge to the stock market.