Market insights,
July 2026
Investing
5 min read
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Global markets once again put on a show of resilience last month, despite rising volatility and geopolitical tensions.
The renewed bombing of Iran by the US was the major story in July, upending a fragile ceasefire that had brought temporary relief to the region, and to investors.
In response, Iran’s tactical decision to restrict the flow of trade through the Strait of Hormuz sent oil prices soaring. There was certainly a feeling of déjà vu, as all sides returned to their tiresome playbooks.
These developments overshadowed a potential glimmer of hope elsewhere in the region, with the news at the end of the month that Hamas had agreed to disarmament – considered one of the major thresholds for ending the grinding war in Gaza [1].
Collective events last month were a reminder that geopolitics, and especially US foreign policy, remain influential forces in 2026.
AI angst again
Elsewhere, the AI trade rollercoaster kicked back into action, sending equity investors on a dizzying ride in the second half of July.
There was a headline-grabbing bout of volatility when a South Korean chipmaker, SK Hynix – which also happens to be the world’s second-largest – undershot its forecasted profits [2].
Some investors went into doomsday mode, reading it as a sign that AI spending levels had become too excessive to generate sustainable revenues (and therefore returns for investors). It triggered a rapid sell-off of similar semiconductor stocks.
Things did ultimately settle back down once some of the big US tech firms, including Google, Amazon and Microsoft published their own results [3]. Their robust health, and their ongoing need for chips as they hyperscale their own AI endeavors, saw investors return to the so-called AI trade.
As we have cautioned before, volatility in this space is to be expected. Events in July are unlikely to be the last of their kind in 2026.
Currency drama in Japan
Staying in Asia and last month saw an historic intervention by the US to help prop up the Yen.
At one point in July, Japan’s currency had fallen to its weakest level versus the US dollar since 1986 [4]. The depreciation was driven by the Prime Minister’s pledge to see good on her promise of tax cuts, this time linked to food and drink.
Some investors feared the pledge would strain Japan’s ability to balance its books, with the expected fall in tax receipts coming at a time of higher oil prices.
In the end, the US stepped in to buy Japanese Yen and restore a sense of currency order for its major ally in the region.
American resilience impresses
Meanwhile, the US economy remained in decent health last month despite the fallout from rising geopolitical tensions and the emergence of new US trade tariffs.
Canada copped one of the bigger blows, with the US President proposing 50% tariffs on some Canadian goods [5]. In total, 60 trading partners had tariffs of 10% to 12.5% imposed on them by the US last month [6].
For all the global criticism and even domestic legal challenges, Trump isn’t backing down on his ‘America first’ pledge before the mid-term elections in November.
Nonetheless, the US economy continued to plough ahead. As noted in a colleague memo to Helm Wealth staff by Bevan Graham, economist at our sister firm, Salt Funds Management: “The US Q2 GDP report was much stronger than the below-consensus+1.5% (seasonally adjusted rate) headline increase would suggest. Private domestic demand rose at a 3.9% clip. Consumption came in at +3.2%, rebounding strongly from the Q1 softness. Equipment investment came in at +15% for a second straight quarter, underlining the continuing strength in capex, particularly AI-related. A solid result overall.”
It was against this backdrop that the US Federal Reserve opted to keep rates unchanged in July. That made it five-in-a-row on the hold front, albeit the vote wasn’t unanimous. Three voting members of the FOMC had opted for a 0.25% rate hike to counter inflation risk [7].
Scorched Europe
Lastly, a brief word on dramatic events in Europe where record-high summer temperatures and dry conditions combined with devasting effect last month.
Massive wildfires saw in excess of 300,000 people being evacuated from their homes across France and Spain [8].
From an investor perspective, it is increasingly hard to overlook fast-changing conditions in the continent. A joint research paper last year highlighted the economic impact that hotter temperatures were having, including lower output and productivity levels, fractured supply chains, and disrupted tourism revenue [9].
Without doubt, conditions in Europe are becoming increasingly challenging. The next COP gathering for global leaders, policy makers and financiers is in Turkey in November. By then, the extent of the summer season damage across Europe will be much clearer.
In summary
In parts, there was a depressing familiarity about events in July. The return to war in Iran, coupled with new trade tariffs from the White House and yet-more tech stock tremors, spooked investors at various times across the month.
If you had only read the news headlines, you’d have been forgiven for thinking the end was nigh. For investors, however, the reality was rather different. For all the global disruption, markets were resilient in July and Corporate America kept powering ahead.
Investors who held globally diversified assets and who resisted the urge to panic sell, may have had a better month than they were expecting.
Our core message: Brace for more volatility this year but by no means panic.
Sources and references
[1] Source: https://www.reuters.com/world/middle-east/israeli-strikes-kill-three-gaza-including-two-children-amid-new-ceasefire-push-2026-07-30/
[2] Source: https://www.ft.com/content/e8e3a60a-059c-45b5-bbe3-49add14fd343?syn-25a6b1a6=1
[3] Source: https://www.ft.com/content/23eb1fd4-8301-4c0e-89b3-2647389e6226?syn-25a6b1a6=1
[4] Source: https://www.ft.com/content/5de204a4-4db6-458c-aa9a-324e6bd5e766?syn-25a6b1a6=1
[5] Source: https://www.bbc.com/news/articles/cg4dzq3x3e1o
[6] Source: https://www.reuters.com/world/us/trump-imposes-forced-labor-duties-60-trading-partners-as-10-us-tariffs-expire-2026-07-24/
[7] Source: https://www.msn.com/en-us/money/economy/fed-holds-interest-rates-steady-as-inflation-raises-pressure-for-a-hike/ar-AA28ZBvm?ocid=BingNewsSerp
[8] Source: https://www.abc.net.au/news/2026-07-26/france-spain-wildfires-force-250-000-people-to-flee-homes/106958588
[9] Source: https://www.cnbc.com/2026/07/30/europe-heatwaves-economy-wildfires-summer.html
Photo credit: Thomas Kinto for Unsplash