TCW Funds published its second-quarter 2026 investor letter for the TCW Relative Value Mid Cap Fund, which returned 14.10% against 13.40% for its index. Equities recovered from first-quarter lows and the S&P 500 reached record highs, supported by AI-related data-center spending, robust earnings and a resilient economy despite Federal Reserve leadership-transition volatility and Middle East tensions. The fund said stock selection added 174 basis points. S&P 500 earnings-growth estimates increased from 18.8% to 23.1%. Jabil Inc. gained 45.2% during the quarter as demand for AI data-center infrastructure strengthened, while its improving automotive and industrial businesses provided additional support. The fund said elevated valuations and narrow margins for error leave markets sensitive to policy and earnings, while AI, digital infrastructure and energy-transition themes remain supportive. Labor and consumer concerns may be offset by OBBB-related stimulus, and the firm favors resilient, cash-generative businesses.