Seaspray Private Q2 Investment Review & Outlook 2026
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What caused the strong equity market recovery in Q2 2026?
Hello and welcome to the C-Spare Private Investment View and Outlook for Q2 2026. My name is Cas Levin, Investment Research Analyst at C-Spare Private. Before we look ahead to Q3, let's briefly review the second quarter. Q2 2026 saw a significant uplift in equity markets as the Middle East conflict cooled and oil flows began to return to normality. This lowered inflation expectations and somewhat eased expectations for future interest rate hikes. Equities have also benefited from a tech fuel rally, with the quarter witnessing the largest IPO in history, SpaceX. In the US, the S&P 500 and Nasdaq gained 12% and 21% respectively during Q2. In Europe, markets gained between 9% and 11%, with the UK lagging due to its relative lack of major tech stocks.
Japan's Nikkei 225 gained 30%, while China's Shanghai Composite gained 4%.
How did inflation trends and central‑bank actions evolve during the quarter?
The MSCI World Index recovered from Q1 losses, rising 11% during Q2 and over 6% year-to-date. The second quarter was an excellent example of how quickly markets can recover following periods of heightened geopolitical uncertainty. We have witnessed several such recoveries over the past few years, and despite all the volatility endured due to the conflict in the Middle East, equity markets are now in a stronger position than before the conflict began. While markets recovered strongly, inflation remained one of the defining themes of the quarter. As projected in our April outlook, the Middle East conflict had the expected repercussions on inflation. Across major economies, inflation ticked up throughout Q2.
US CPI reached 4.2% in May, European inflation broke through the 3% barrier for the first time since 2023, and here in Ireland, inflation reached 3.6%. Although this acceleration is expected to be temporary, it has prompted a shift in tone from major central banks. The European Central Bank raised rates for the first time since 2023, reflecting the conflict's impact on energy-sensitive regions.
Why was the SpaceX IPO considered the standout event of Q2?
The Bank of England held at 3.75% in June in a 72-vote, though Governor Bailey warned inflation could reach 3.25% by Q4, leaving real potential for an interest rate hike in the latter stages of the year, depending on the economy's performance. In the US, Kevin Warsh replaced Jerome Powell as Fed Chair, where interest rates held steady, though a hike before year-end remains likely should inflation remain elevated. Therefore, as we look ahead to Q3 and beyond, we can expect little scope for further interest rate cuts, while inflation is expected to remain elevated but controlled in the aftermath of the Middle East conflict. Alongside macroeconomic developments, another major team continued to dominate markets, artificial intelligence.
Perhaps the standout event of Q2 was the SpaceX IPO. The company raised a record $75 billion on 12 June, making it the largest public offering in history and helping Elon Musk become the world's first trillionaire. Q2 also saw memory chip makers emerge as standout winners of the AI boom. Micron, SK Hynix, and Samsung were among the best performing stocks globally, driven by surging demand for high bandwidth memory chips used in AI data centers. All three companies passed the $1 trillion market cap threshold in Q2, cementing them among the world's largest and most important companies.
How are AI‑driven chip makers and tech giants reshaping investment flows?
SK Hynix and Samsung were also the first two South Korean companies to reach $1 trillion in market capitalization. Now driving much of this growth is the sheer scale of investment in artificial intelligence. For the first time, the world's biggest tech companies, Microsoft, Google, Amazon, and Meta, collectively spend over $120 billion on AI in a single quarter. That level of commitment is what is driving demand for the chips, data centers, and the energy to power them. The next round of earnings reports begins in early July, a key test for equities, in particular, AI and tech giants who have committed billions to the build-out of AI. Consensus points towards another positive earnings season. With FactSet estimating earnings growth at 23% in Q2, up over 4 percentage points since the start of the quarter.
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Chapters
6 chapters
1
What caused the strong equity market recovery in Q2 2026?
0:00–0:45
2
How did inflation trends and central‑bank actions evolve during the quarter?
0:45–1:45
3
Why was the SpaceX IPO considered the standout event of Q2?
1:45–2:57
4
How are AI‑driven chip makers and tech giants reshaping investment flows?
2:57–3:53
5
What is driving the rapid growth of renewable energy and clean‑tech projects in Ireland?
3:53–5:02
6
What are the key outlook points for Q3 2026 and the rest of the year?
5:02–5:46