The second quarter of 2026 ended on a strong note, with the S&P 500 Index posting its best quarterly performance in six years. Investor sentiment was buoyed by the ongoing AI infrastructure boom, easing oil-market concerns after a Middle East truce, a hawkish shift from the Federal Reserve and renewed strength in the U.S. dollar.
Against this favorable backdrop, the finance sector performed impressively in the second quarter. The Zacks Finance sector soared 10.9% in the quarter, driven by a surge in retail trading, higher capital market volumes and fading fears of an economic slowdown. However, the sector underperformed the S&P 500, which posted a 15.5% return during the same period.
The top three S&P 500 gainers from the finance sector are Robinhood Markets Inc. HOOD, Franklin Resources, Inc. BEN and State Street Corporation STT.
Q2 2026 Price Performance
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The big question for investors is whether the rally in these high-flying stocks has already run its course or if more upside remains. A closer look at each stock can help determine whether they still deserve a place on investors’ watchlists.
Robinhood: Retail Trading Boom, Expanding Product Lineup
Robinhood emerged as the top performer in the finance space in the second quarter of 2026, fueled by a sharp revival in retail trading activity and continued progress in expanding its product ecosystem. The company benefited from strong engagement across equities, options, crypto and prediction markets, as risk appetite improved and individual investors returned to the market.
Robinhood’s push beyond traditional brokerage services also strengthened investor confidence. Recent initiatives, including AI-powered trading capabilities, an agentic credit card, prediction-market expansion and broader wealth-management offerings, highlighted the company’s ambition to become a more diversified financial-services platform. These launches not only deepen customer engagement but also open up new revenue opportunities across trading, subscriptions, payments and advisory services.
Analysts are also bullish on HOOD’s performance. Over the past week, the Zacks Consensus Estimate for 2026 and 2027 earnings has been revised upward to $1.81 and $2.45, respectively. Though earnings are expected to decline 11.7% this year, the trend will reverse in 2027, with earnings numbers likely to jump 35.2%.
Earnings Estimates
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At present, Robinhood carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Franklin Resources: Better Market Conditions Lift AUM
Franklin Resources is one of the top-performing finance stocks in the second quarter of 2026, supported by improving market conditions and stronger investor sentiment. The company, which operates as Franklin Templeton, benefited as rising equity markets helped lift asset values and boosted demand for investment products.
BEN’s preliminary assets under management (AUM) rose 1.9% sequentially to $1.78 trillion as of May 31, 2026, reflecting the positive impact of markets and $4 billion of long-term net inflows. Also, the company stepped up its efforts to strengthen its presence in digital assets and expand its active cryptocurrency investment capabilities by acquiring 250 Digital, an active cryptocurrency investment management firm. Subsequently, it launched Franklin Crypto, a dedicated active digital asset management division.
These trends suggested that Franklin Resources has been gaining from a healthier investment backdrop, improved client activity and better flow momentum. These efforts have resulted in bullish analyst sentiment, with the Zacks Consensus Estimate for earnings moving upward to $2.79 and $3.06 for fiscal 2026 and fiscal 2027, respectively, over the past seven days. These imply earnings growth of 25.5% for fiscal 2026 and 9.9% for fiscal 2027.
Earnings Estimates
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At present, BEN sports a Zacks Rank #1.
State Street: Supportive Rate Environment, Macro Optimism
Investor optimism for State Street in the second quarter of 2026 was supported by hawkish Fed signals, improving macro sentiment and solid operating momentum. The company benefited from higher market levels, which aided asset-based fees, while a still-supportive interest-rate environment helped sustain net interest income (NII).
The company’s first-quarter performance was impressive, with record assets under custody and/or administration of $54.5 trillion and AUM of $5.6 trillion. This reflects stronger client activity and market appreciation. Driven by the stronger start to the year and continued traction across the franchise, STT now projects total fee revenues to increase 7-9% from the prior expectations of 4-6% growth. Similarly, NII is now expected to rise in the 8-10% range from the previous target of growth in low single digits.
The company’s scale in investment servicing, custody and asset management positioned it well to benefit from improving investor confidence and healthier capital markets. This is also driving analyst optimism. The Zacks Consensus Estimate for earnings has moved upward to $12.53 and $14.03 for 2026 and 2027, respectively, over the past seven days. These indicate earnings growth of 21.7% for 2026 and 12% for 2027.
Earnings Estimates
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At present, State Street carries a Zacks Rank #2 (Buy).
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Franklin Resources, Inc. (BEN): Free Stock Analysis Report
State Street Corporation (STT): Free Stock Analysis Report
Robinhood Markets, Inc. (HOOD): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).