JUNE 2026 Newsletter: Stock Market Near Highs - Is Optimism Overpriced?

Equity markets have continued their advance in recent weeks, with the S&P 500 hovering near a record high after a rare nine‑week winning streak driven by strong AI‑related earnings and a more constructive geopolitical backdrop. The tentative U.S.–Iran peace agreement announced last evening has eased one of the market’s major uncertainties, and the Strait of Hormuz is now expected to reopen following the formal signing scheduled for Friday. While this development has helped calm energy markets, stock prices still look elevated by traditional measures, and investors may reasonably wonder whether expectations have become too optimistic.

One way investors often judge whether stocks look expensive or inexpensive is by using valuation measures such as the price‑to‑earnings ratio, or P/E ratio. Put simply, the P/E ratio compares a company’s stock price to the profits it earns. A higher P/E ratio means investors are paying more for each dollar of earnings. While this can be useful when thinking about long‑term opportunities and risks, it is not a reliable tool for predicting short‑term market moves.

Today, the S&P 500’s P/E ratio is around 21, which is on the higher side by historical standards. That may still be reasonable if earnings continue to grow and the U.S. economy remains resilient. But for stocks to move meaningfully higher from here, key factors such as inflation, oil prices, and interest rates will likely need to remain supportive. If they do not, market returns in the second half of the year may be more modest and could come with periods of volatility.

Even though valuations look elevated for the broad market, some parts of the technology sector may still offer attractive opportunities if their growth continues. Many investors remain unsure about how quickly AI will improve productivity and boost profits, which means there could still be room for positive surprises. At the same time, companies are spending heavily on AI, and that spending could pressure cash flow if the expected benefits take longer to appear.

Looking ahead, the market narrative will likely hinge on two things: whether company earnings continue to grow, and whether investors remain comfortable with today’s higher valuations. AI remains a powerful tailwind for both economic activity and corporate profits, supporting the case for staying invested. The promise of what AI can bring is exciting, but the optimism may be getting ahead of what the technology can deliver. As we navigate this landscape of high expectations—and now a shifting geopolitical backdrop—balancing enthusiasm for long‑term growth with a disciplined, diversified approach remains the clearest path forward.

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.

References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

All data is provided as of June 1, 2026.

The P/E ratio (price-to-earnings ratio) is a measure of the price paid for a share relative to the annual net income or profit earned by the firm per share. It is a financial ratio used for valuation: a higher P/E ratio means that investors are paying more for each unit of net income, so the stock is more expensive compared to one with lower P/E ratio.

Earnings per share (EPS) is the portion of a company’s profit allocated to each outstanding share of common stock. EPS serves as an indicator of a company’s profitability. Earnings per share is generally considered to be the single most important variable in determining a share’s price. It is also a major component used to calculate the price-to-earnings valuation ratio.

• ✨NEW✨ Introducing theBalance Verification Letter Featurethat enables clients to generate an official letter directly from Account Viewthat confirms their account balance as of a specific date. This letter may be used for common third‑party requests such as mortgage applications, lease agreements, real estate transactions, visa requests, or other situations that require proof of financial assets.Once logged into Account View:
  
  • In web,clients can access this capability from the Balances Page. Select Generate Balance Letter, choose applicable accounts, customize how balances are displayed, enter the recipient’s information, and preview the letter. Generated letters are saved to My Files for future reference.
    
    
  • In mobile,clients can access this capability from the Balances Page by tapping Verification Letter. They can then choose how balances are displayed, select accounts, enter the recipient’s information, and preview the letter before generating it. Generated letters are saved to My Files for future reference. 
    
    
• If you’re not yet enrolled inAccount View, setting up an existing client login only takes a few minutes! This secure platform provides access to your portfolio status and account-related documents, along with a wide range of convenient self-service features—such as mobile check deposit, ACH transfers, RMD information, beneficiary updates, and balance verification letters. To get started, ourFAQ pageoffers several insights that may be of assistance. Additionally, ourGet to Know Account View 2.0brochure provides step-by-step login instructions and answers to common AV questions. With anAccount View login, you can securely access your financial information anytime, anywhere, from any device.

Who Can Deduct Car Expenses on Their Tax Returns? 

Can you deduct expenses such as gas, depreciation, and lease payments on your tax returns? If you are a business owner or self-employed individual, you may be able to. If you use your car for business and personal purposes, you may split the expenses and base the deductions on a portion of the mileage used for business. 

There are two methods to calculate the car expenses you can deduct. The first method involves calculating and deducting expenses, including depreciation, lease payments, gas and oil, tires, repairs and tune-ups, insurance, and registration fees. 

The second entails using the standard mileage rate, which is calculated to reflect gas and other factors. In 2021, the standard mileage rate is 56 cents per mile. Taxpayers who want to use the standard mileage rate for a car they own must use this method in the first year the vehicle is available for use in their business. 

^{This information is not a substitute for individualized tax advice. Please discuss your specific tax issues with a qualified tax professional}

^{Tip adapted from IRS.gov}

The Rise of "Delayed-Action" QR Code Scams - What to Know

Cybercriminals are shifting away from traditional malicious links in emails, opting instead for embedded QR codes—a tactic known as "quishing."

By hiding a malicious link inside a QR code, scammers can successfully bypass standard security filters that scan text and URLs. These emails often mimic urgent notices from internal IT departments, payroll, or popular shipping services, asking you to "scan the code to update your security settings" or "verify your account."

Because you use your personal smartphone to scan the code, the security protections on your work computer are completely circumvented, taking you directly to a fraudulent page designed to steal your credentials or financial information.

How to Protect Yourself:

• Verify the Source:If an email unexpected requires a QR code scan to log in or update an account, contact the sender through a known, trusted channel first.
• Preview the URL:Most modern smartphone cameras will display a preview of the web address when you hover over a QR code. If the URL looks strange or doesn't match the official company domain, do not tap it.
• Avoid Scanning in Public Places:Be cautious of physical QR codes stuck onto parking meters, flyers, or restaurant menus, as scammers can easily paste their own malicious stickers over legitimate ones.

A man was reading a book in his house when all of a sudden a massive power outage hit the neighborhood, plunging the entire home into complete darkness. Yet, the man continued reading his book without any disruption. How was this possible?

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Last Month's Riddle:Three different doctors say that Paul is their brother, yet Paul claims he has no brothers. Who is lying?

Answer: No one is lying. The three doctors are Paul's sisters.