S&P, Nasdaq post biggest quarterly gains since 2020 amid volatility

The S&P 500 climbed roughly 14% in the second quarter of 2026. The Nasdaq advanced between 20% and 25% over the same period. Both figures represent the strongest quarterly performances either index has posted since the frenetic COVID-era rebound of Q2 2020.

For crypto investors watching from the sidelines, the contrast is almost painful. While traditional equities partied like it was 2020 again, Bitcoin spent the quarter hovering around $60,000, struggling to find any meaningful upward momentum.

What drove the rally

Artificial intelligence continued to be the market’s favorite narrative, pulling technology and semiconductor stocks higher across the board. Corporate earnings projections for the S&P 500 landed in the range of 22% to 25% growth for the full year. Geopolitics played a supporting role too. The easing of tensions between Iran and Israel removed a significant source of uncertainty that had been weighing on global risk appetite.

The quarter wasn’t a smooth ride up, though. Chip stocks experienced sharp selloffs at various points, and the S&P 500 posted its first multi-day losing streak in months.

By the time the quarter closed, the gains had built on an already strong foundation. Through May, the S&P 500 was already up around 11%, with the Nasdaq sitting at roughly 16%.

The crypto divergence problem

Bitcoin’s inability to sustain momentum above $60,000 during a quarter where the Nasdaq gained more than 20% suggests that the capital flowing into equities is not treating crypto as part of the same trade.

Part of the explanation is structural. AI is not just a narrative in equities. It is showing up in actual earnings beats and forward guidance from major corporations. Crypto, for all its promise, hasn’t produced an equivalent earnings story this cycle.

What this means for investors

Projected earnings growth of 22% to 25% for the S&P 500 is exceptional by any historical standard, and AI-linked companies are delivering the kind of results that justify elevated valuations. Semiconductor stocks, despite their intra-quarter volatility, remain at the center of the trade.

For crypto-focused investors, Bitcoin trading around $60,000 while equities rip higher means digital assets are not necessarily hostage to an equity pullback if one materializes later this year.

Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.