July 2026 Market Update

Global events continue to shape the economic outlook, creating new opportunities and risks for investors. From renewed tensions in the Middle East and evolving Canada-U.S. trade relations to the latest inflation data and central bank decisions, understanding the forces driving markets is more important than ever.

August 7, 2026

Introduction

Global equity markets finished largely unchanged over the month of July. Investor sentiment was relatively muted as U.S.-Iran tensions escalated, resulting in fresh attacks and bringing shipping through the Strait of Hormuz to an effective standstill. Oil prices surged higher over the month, reigniting concerns about inflation. As reported in July, inflationary pressures subsided in June but are expected to be reported as having risen again in July as the global supply of oil was hindered by the Mideast conflict.

Major central banks, including the Bank of Canada (BoC), U.S. Federal Reserve Board (Fed), Bank of England and European Central Bank (ECB), held their policy interest rates steady at their July meetings. The U.S. and Europe both reported their respective economies expanded in the second quarter of 2026. Trade tensions were back in the news. The U.S. implemented new tariffs on approximately 60 countries/regions around the world, which replaced the expiring tariffs that were imposed when the “Liberation Day” tariffs were voted down by the U.S. Supreme Court. Meanwhile, the U.S. threatened fresh tariffs on some Canadian goods.

In Canada, the S&P/TSX Composite Index moved higher over the month, getting a strong performance from the energy sector. U.S. equities inched lower. Yields on 10-year government bonds in Canada and the U.S. rose over the month.

Click here to read the full market update