Monthly Market Insights – July 2026

July was shaped by resilient global growth but rising inflation and geopolitical risks, as renewed US–Iran hostilities disrupted energy markets and increased uncertainty around the global outlook. In the United States, inflation surprised to the downside and growth moderated, although the Federal Reserve maintained a cautious stance as price pressures remained elevated. Eurozone activity proved resilient despite firmer inflation, while the UK continued to see cooling price pressures. China’s economy lost momentum amid weak domestic demand, whereas Japan maintained solid growth dynamics alongside a more hawkish central bank stance.

Financial markets were dominated by the collapse of the Middle East ceasefire and a sharp reversal in AI-related trades. Global equities finished broadly flat, with European markets outperforming as investors rotated away from highly valued technology and semiconductor stocks toward value-oriented sectors. Sovereign bonds came under pressure as inflation expectations pushed yields higher, while credit markets also weakened. Oil prices surged on renewed supply-disruption risks, the US dollar declined following the Fed’s decision to hold rates steady, and cryptocurrency markets strengthened significantly, supported by improving ETF inflows and continued regulatory progress.