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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 June 30th, 2026.
Equity markets were pulled in opposite directions as the second quarter drew to a close. On one side, a newly hawkish Federal Reserve and the firmest inflation readings in three years argued for caution. On the other, a tentative easing of the conflict between the U.S. and Iran pulled oil prices sharply lower and revived appetite for risk. Technology shares, buoyed by the relentless buildout of artificial intelligence infrastructure, did much of the heavy lifting, helping equities recover from a mid-month slide and close out one of their strongest quarters in years. The result was a choppy stretch that nonetheless ended on firmer footing.
The energy picture shifted quickly as a preliminary deal opened a 60-day negotiating window and raised hopes that the Strait of Hormuz would reopen. Brent crude oil slid to roughly $73.50 a barrel, and West Texas Intermediate dipped just below $70, both their lowest levels since the war began. Cheaper oil eased a key inflation worry and lifted sentiment into quarter-end. Technology led the rebound, and the Dow Jones Industrial Average notched its first close above 52,000 on June 29. The milestone coincided with Alphabet’s debut in the index, replacing Verizon after 22 years and deepening the Dow’s tilt toward Big Tech. The S&P 500 and Nasdaq, while below their early-June peaks, still secured their best quarter since 2020.
Policy and prices took center stage at midmonth. At Kevin Warsh’s first meeting as chair, the Fed held its benchmark rate at 3.50% to 3.75% on June 17 but delivered a hawkish surprise, lifting its median year-end projection to 3.8% and signaling that at least one rate hike this year is now on the table. The data reinforced that stance. The Personal Consumption Expenditures (PCE) price index, the Fed’s preferred gauge, rose 4.1% in the 12 months through May, its highest in three years, while core PCE, which excludes food and energy, climbed 3.4%1. Resilient growth gave officials room to wait: the third estimate of first-quarter gross domestic product was revised up to 2.1%2, and jobless claims eased to around 215,0003.
The bottom line: Attention now turns to a crowded July. The 10% global tariff is set to expire on July 24, raising fresh trade-policy questions, while the Fed’s late-July meeting, the June employment report, and the start of second-quarter earnings will test the market’s resilience. Whether the fragile Iran ceasefire and the recent oil relief hold may prove just as decisive.
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.