You are now leaving the BlueStem Wealth Partners website and will be entering the Charles Schwab & Co., Inc. (“Schwab”) website.
Schwab is a registered broker-dealer, and is not affiliated with BlueStem Wealth Partners or any advisor(s) whose name(s) appear(s) on this website. BlueStem Wealth Partners is independently owned and operated. Regardless of any referral or recommendation, Schwab does not endorse or recommend the investment strategy of any advisor. Schwab has agreements with BlueStem Wealth Partners under which Schwab provides BlueStem Wealth Partners with services related to your account. Schwab does not review the BlueStem Wealth Partners website(s), and makes no representation regarding information contained in the BlueStem Wealth Partners website, which should not be considered to be either a recommendation by Schwab or a solicitation of any offer to purchase or sell any securities.
Market Commentary and Trade Rationale
At BlueStem Wealth Partners it is important to us that you are well informed about how we are managing your portfolio. The written commentary below is for the time period ending July 31st, 2026.
Markets spent the second half of July adjusting to forces pulling in opposite directions. The artificial intelligence trade that powered indexes through the first half of the year came under pressure, prompting investors to rotate into areas that had previously lagged. The Federal Reserve held rates steady, but an unusually divided vote raised questions about the central bank’s commitment to containing inflation. Renewed fighting between the United States and Iran near the Strait of Hormuz added another source of uncertainty by threatening global energy supplies. Major indexes ultimately finished little changed, masking significant movement beneath the surface.
That rotation defined the period. Semiconductors bore the brunt of the decline, with the Philadelphia Semiconductor Index falling roughly 24% from its late-June high as investors became less willing to reward ambitious spending plans without clearer evidence of returns. The Nasdaq Composite briefly fell more than 10% below its record, but capital largely shifted within the market rather than leaving it altogether. Health care and financials climbed to record highs, while the equal-weighted S&P 500 reached a new high on July 28, signaling broader participation rather than a breakdown in investor confidence. Volatility remained relatively contained, and strong capital-spending plans from the largest cloud providers helped technology stabilize toward month-end.
Monetary policy and economic data gave both sides of the market debate something to consider. The Fed held its benchmark rate at 3.50% to 3.75% on July 29, marking a fifth consecutive hold, though three regional Fed presidents dissented in favor of a quarter-point increase. Treasury yields rose sharply, with the 10-year yield topping 4.7% and the 30-year reaching 5.25%. Meanwhile, inflation-adjusted gross domestic product expanded at a weaker-than-expected 1.5% annualized rate in the second quarter1. Inflation offered a more encouraging signal, as the Personal Consumption Expenditures (PCE) price index declined 0.1% in June and slowed to 3.7% year over year2. However, Brent crude settled above $90 following strikes on tankers transiting the Strait of Hormuz, raising the risk that higher energy costs could complicate the inflation outlook.
The bottom line: July’s relatively calm index performance obscured a meaningful shift in market leadership. Participation broadened beyond the year’s dominant technology trades, but slower growth, rising Treasury yields, cooling measured inflation, and higher oil prices left the economic and Federal Reserve policy outlook unusually uncertain heading into the fall.
Recent Trade Rationale: If you would like to see a high-level recap of recent changes to the model portfolios, please click on the link to read the July 2026 Trade Rationale. As a reminder, we utilize quantitative techniques to manage the models. Level Elements are designed to manage your model’s equity and fixed income exposure over time. This changes as fundamental, quantitative, and economic data changes. Style Elements are designed to manage what is in those equity and fixed income exposures.
All opinions expressed in this commentary are for general informational purposes and constitute the judgment of the author(s) as of the date of the report. These opinions are subject to change without notice and are not intended to provide specific advice or recommendations for any individual or on any specific security. The material has been gathered from sources believed to be reliable; however, BlueStem Wealth Partners cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source. To determine which investments or planning strategies may be appropriate for you, consult your financial advisor or other industry professional prior to investing or implementing a planning strategy. This commentary is not intended to provide investment, tax or legal advice, and nothing contained in these materials should be taken as such. Investment Advisory services are offered through BlueStem Wealth Partners are only offered where BlueStem Wealth Partners and its representatives are properly licensed or exempt from licensure. No advice may be rendered unless a client agreement is in place. The material provided is for informational purposes only and is not meant to be a solicitation or recommendation to buy/sell any security. BlueStem Wealth Partners is an investment advisory firm registered with the Securities and Exchange Commission (“SEC”). SEC registration does not imply a certain level of skill and or expertise.