Moore Financial Solutions Second Quarter 2026
The investment tree you planted previously may have provided more fruit in the second quarter of 2026 with the S&P 500 rising by about 15% (1). Additionally, some small cap funds such as ticker IJR (iShares Core S&P Small-Cap ETF) rose by about 19.3%, as investors felt relieved that interest rates were decreasing (2). This small cap surge was welcomed by portfolio managers such as Moore Financial Solutions, who have closely monitored the historical outperformance of small cap companies, which lagged last year. In Q2 all eyes focused on the U.S./Iran War, as investors pushed WTI crude oil prices to $112.95 on April 6th, 2026, an increase of 104% in 112 days from the December 15th, 2025, low. Investors viewed rising oil prices as a signal of higher inflation and worried that newly appointed Federal Reserve Chair Kevin Warsh might delay the interest rate cuts that many investors expected. Take five minutes every quarter, twenty minutes total for all of 2026, to better understand from my point of view why I believe the stock market is in an uptrend, the movement of other asset classes, and our thoughts of if this can continue.
If a traveler arrived near Kansas City for a World Cup match, knew nothing about Moore F.S. and was curiously asking about firm values, or A.I. was tasked with doing analysis of Moore F.S. quarterly reviews, you would hear a common theme. Repetitively, we attempt to instill three thoughts regarding today's modern investor. First, stocks will move both up and down, so do not get used to 25% years, but be ready to use them to your advantage. Secondly, whether you are an individual client or Moore Financial Solutions managing $27.8 million, we are still a small fish in an enormous ocean of investors. That reality is one reason we avoid trying to time the market or become overly concerned with short-term movements. The intention is not to make either party feel small, rather create a metaphor that you are subject to the tide going up or down and remind you that it will do both. Lastly, this is not Mayberry where Wally's Filling Station, Floyd's Barbershop, and Mayberry Diner represent most of your commerce. In fact, you are likely tied deeply into a global economy with dozens of moving parts from tariff rules to the Strait of Hormuz. We will dive deeper into that strait and use West Texas Intermediate prices for our conversation.
Last quarter we honed in on the logistics of the Strait of Hormuz stating, “That roughly 21-mile-wide body of water, the Strait of Hormuz, realistically can create a recession.” In other words, the economy is increasingly global, and a small shipping route over 7,500 miles from Kansas City impacts your prices for gas and thousands of other items. Moore F.S. took the opinion that the oil price spike would be short lived and spoke freely to clients about this view. We did not take this viewpoint on a hunch, rather we studied the backwardation of WTI crude oil prices. This unique backwardation of oil prices looked similar to the inverted yield curve our firm witnessed for a couple of years from 2022-2024 (you can learn more about yield curve inversion in the previous Moore F.S. reviews written Q3 2024 and Q3 2025). In our backwardation forecasting we did not feel obligated to predict the price of oil, rather we used crude oil futures markets to determine where traders were imagining oil prices. This reassuring feeling of a decrease in oil prices combined extremely well with our buy and hold philosophy. In other words, we did not panic sell stocks in fear that oil might hit $200/barrel, as multiple firms said was possible. Since 1985, the crude oil market has been in contango (a positively sloping price curve) around 42% of the time. It has been in backwardation 58% of the time as measured by the price difference between the front-month contract and contracts for six months in the future (4). Higher fuel prices fueled inflation concerns. As a result of an increasing oil price economy, traders drove interest rates higher as well. An economy that imagined a couple rate decreases for the year now was eyeing a spike in inflation and had to reposition interest rates. As a result, Wall Street pushed the 10-Year U.S. Treasury rate from 4.318% to 4.469% in Q2. Though we aim to avoid interest rate prognostications, we firmly believe the United States will rejoin a decreasing interest rate environment for the remainder of the year, at least from the 4.469% levels, barring geopolitical shocks to the system.
U.S./Iran conflict increased WTI Crude oil prices temporarily
Futures contracts of WTI Crude illustrated a backwardation
Moore Financial Solutions has shifted its focus from simply growing the firm to helping readers become more informed investors and leave each quarterly review with practical, actionable ideas. Though this may not be appropriate for all clients (such as conservative clients), last year we offered our strategy to all readers in hopes that they would benefit. We stated, “we've generally increased the weighting of small/mid cap companies in names such as iShares Core S&P Small Cap ETF (ticker symbol IJR), iShares S&P Mid-Cap 400 Value ETF (IJJ), iShares S&P Mid-Cap 400 Growth ETF (IJK).” This move away from the S&P 500, which would go on to return about 19.9% in that approximate one year of time, to other assets were fruitful. IJR would go on to log about a 30% return, IJJ recorded about 14.7%, and IJK about 25%. While this was about an easing cycle, the reality is interest rates were little changed in that time. However, it appears interest rate projections continue to point to a lower-rate environment. We likely will not be trimming any of these positions this year as we plan to take advantage of further interest rate decreases.
IJR: ~+30%, IJJ: ~+14.7%, IJK: ~+25% compared to the S&P 500’s ~+19.9% increase from 7/7/25-07/06/25 (5)
I think it would be a wonderful time to look at how far the markets have come. As mentioned previously, I generally employ a buy and hold strategy. Foundationally this is designed to result in owning assets that when they fall, they will hopefully recover. Six and a half years ago the S&P 500 was below $2600 as some investors feared Covid-19 and sold shares, only to see the index triple from then to now. I am here to be your steady hand and avoid becoming emotionally rattled by stocks in either direction. Though the range of how long you've been my client varies from a few days to nearly fourteen years, I'd like you to either be encouraged and look at what you've accomplished and be proud of yourself or see that this can be you! I talk every week to clients or the public about whether I believe the markets have come too far too fast and I do see this as a legitimate concern. In fact, I know many advisors that years ago started to derisk portfolios even for those clients with extremely long-time horizons. Instead of fearing this is 1999 all over again, I would rather take it from what the Artificial Intelligence masterminds are thinking and saying. On May 22nd, 2026, Lisa Su (AMD's CEO) quoted “If you think about a baseball game, I would say we are only in the third inning of a nine-inning game” (6). Dan Ives, the global head of technology research at Wedbush Securities offered only three weeks prior, “We're in the third inning of this nine-inning game relative to AI, and that's bullish” (7). In most games in my career that I pitched the third inning was when my arm was feeling the most able, I had tuned into that day's unique variables, and very importantly I was nearing seeing batters that already got one look at my offerings and the challenge was soon to increase. Drawing closely on this I believe A.I. is in the early stages, it has improved due to fine tuning, and it will become increasingly challenging as investors want a return on the high level of A.I. investment with recent estimates showing Global AI spending is projected to exceed $2 trillion through 2026 (8). I continue to believe the money is not in timing the market, rather buying and holding quality companies. Thus, my thought remains a slight shift from A.I. build out companies and heavy hitters (such as the Magnificent 7 stocks in the price-weighted S&P 500 indexes) and into the adopters of the technology such as the other 493 stocks within that index. If appropriate this strategy of a ride up on the backs of the Mag 7 while they deploy capital investment, only to shift to better valuations within the smaller companies that make up the index and will adopt the technology offers better valuations. Together we make an effective team, and I remain committed to being your steady hand and am greatly thankful for the trust you place in me and my teams. Daily, I will continue to work to shield you from companies with the next new creative product to prey upon natural fear of market movements. Please remember I am ready to serve you. If I can help you in any way please give me a phone call, it is my joy to guide you through life's financial challenges.
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1. https://finance.yahoo.com/quote/%5EGSPC/history/
2. https://www.marketwatch.com/investing/fund/ijr/charts?mod=mw_quote_advanced
3. https://www.marketwatch.com/investing/index/spx/charts?mod=mw_quote_advanced
4. https://www.cmegroup.com/insights/economic-research/2026/implications-of-wti-oil-futures-in-backwardation-amid-the-supplycrunch.html
5. https://www.marketwatch.com/investing/index/spx/charts?mod=mw_quote_advanced
6. https://techsoda.substack.com/p/amds-lisa-su-ai-boom-is-only-in-the
7. https://www.fool.com/investing/2026/05/01/tech-15-upside-2026-ai-trade-3rd-inning-dan-ives/
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