Monthly Market Update - July 2026

Markets experienced greater volatility in June as investors reassessed high valuations in AI-related companies and adjusted expectations for future interest rates. While U.S. stocks reached new highs during the month, a late-June pullback in technology stocks caused both the Nasdaq and S&P 500 to retreat from record levels.

Despite market fluctuations, the underlying economy remained resilient. Strong GDP growth, healthy consumer spending, and a stable labor market continued to support economic activity. At the same time, inflation remained above the Federal Reserve’s target, reinforcing the view that interest rates could remain elevated for longer than previously expected. A positive development was a decline in oil prices, which helped ease some inflation concerns and provided support for sectors outside of technology.

As always, please reach out with any questions about economic trends or forecasts and how they may impact your finances. We are here to support you and help you stay aligned with your long-term financial goals. 

Stocks

Although enthusiasm was abundant in June, returns were not, with both the S&P 500, and the NASDAQ falling on the month, finishing the blockbuster rally seen in April and May. The selloff was very narrow and led predominantly by tech companies as valuations appeared stretched on their stocks. Despite this, there was much anticipation around SpaceX, the largest private company to go public in history. Investors initially bid up the price of the stock, but when it announced it would be issuing bonds to raise further money, its share price fell. Outside of tech, investors were reassured by progress towards a lasting peace deal in the Middle East, which would hopefully bring down oil prices by reopening the Strait of Hormuz.  

Sector Performance

Despite the negative headline returns for some of the major indices, only four of the 11 sectors were negative. The energy sector fell as oil prices decreased through June, but the remaining three sectors – tech, communication services, and consumer discretionary – were all impacted by profit taking. Investors sold shares of many of the large companies and reallocated elsewhere within equities to better position themselves amid higher rich valuations from tech companies. Through the first half of the year, only three sectors are negative, as strong earnings and good sentiment from investors have led to a rally in the majority of the market.  

Bonds

Fixed income markets generated positive returns in June despite Treasury yields finishing the month relatively unchanged. Throughout the month, Treasury yields moved higher and lower as investors weighed resilient economic data, the Federal Reserve's policy outlook, and developments in the Middle East. By month-end, easing geopolitical tensions and softer inflation concerns helped offset earlier increases in yields, allowing fixed income markets to finish the month on solid footing. During his first press conference as Federal Reserve Chairman, Kevin Warsh reaffirmed the Fed's commitment to bringing inflation back toward its target but stopped short of providing clear guidance on the future path of interest rates. 

Economic Update

Economic data released in June showed a continuation of the trend seen in May and April. In short, higher inflation, coupled with better growth figures, and a consumer that continues to spend. GDP for the first quarter got its final revision, and was moved upward to 2.1%, just above the long-term average of 2%.  

Inflation, as measured by the Consumer Price Index, rose to 4.2% – the highest reading in three years, as oil prices weighed on the index. Retail sales improved, climbing 6.9% in the past year, signaling that despite higher prices, consumers are not feeling stagnant. In addition, the job market showed signs of improvement, with the unemployment rate holding steady at 4.3%, while the economy added 172,000 non-farm payrolls.  

Consumer sentiment also rose from an all-time low, moving up to 49.5 points – well below average, but a sign of improvement nevertheless. Through it all, June set a strong economic backdrop for the rest of the summer, but investors are keeping their eyes on inflation to ensure it does not accelerate and derail an otherwise strong economy.   

A stunning photograph of two young southern elephant seals taking their first swimming lessons has captured the imagination of nature lovers , earning Australian photographer Matty Smith the overall title in the prestigious Underwater Photographer of the Year 2026 competition.  

The winning image, Rockpool Rookies, was taken in a shallow rockpool on Sealion Island in the Falklands and beautifully showcases a pivotal moment in the seals’ lives. After being weaned, elephant seal pups must suddenly fend for themselves, learning essential survival skills without their mothers. Smith documented this remarkable transition as dozens of curious pups gathered in the island’s rockpools to bravely explore the ocean for the first time.  

Among a collection of winning images featuring playful seals, smiling whales, and historic shipwrecks, Rockpool Rookies stood out for its powerful storytelling and emotional connection, reminding us that some of nature’s most inspiring moments happen beneath the surface. 

For more information on this incredible story, read here. 

THOUGHT FOR THE MONTH

^{Index Definitions}

^{Dow Jones Industrial Average:The Dow Jones Industrial Average® (The Dow®), is a price-weighted measure of 30 U.S. blue-chip companies. The index covers all industries except transportation and utilities.}

^{Dow Jones U.S. Real Estate Total Return Index:The index is designed to track the performance of real estate investment trusts (REIT) and other companies that invest directly or indirectly in real estate through development, management, or ownership, including property agencies.}

^{NASDAQ Composite:The NASDAQ Composite is a market-cap weighted index of all issues listed on the Nasdaq stock exchange. It is heavily weighted towards the technology sector.} 

^{S&P 500 Bond Index:The S&P 500® Bond Index is designed to be a corporate-bond counterpart to the S&P 500, which is widely regarded as the best single gauge of large-cap U.S. equities. Market value-weighted, the index seeks to measure the performance of U.S. corporate debt issued by constituents in the iconic S&P 500.}

^{S&P 500 Consumer Discretionary:The S&P 500® Consumer Discretionary comprises those companies included in the S&P 500 that are classified as members of the GICS® consumer discretionary sector.}

^{S&P 500 Consumer Staples:The S&P 500® Consumer Staples comprises those companies included in the S&P 500 that are classified as members of the GICS® consumer staples sector.}

^{S&P 500 Energy:The S&P 500® Energy comprises those companies included in the S&P 500 that are classified as members of the GICS® energy sector.}

^{S&P 500 Financials:The S&P 500® Financials comprises those companies included in the S&P 500 that are classified as members of the GICS® financials sector.}

^{S&P 500 Index:The S&P 500® index is a market-cap weighted index of the largest 500 companies headquartered in the United States. The index covers approximately 80% of available market capitalization.}

^{S&P 500 Utilities:The S&P 500® Utilities comprises those companies included in the S&P 500 that are classified as members of the GICS® utilities sector.}

^{S&P U.S. Aggregate Bond Index:The S&P U.S. Aggregate Bond Index is designed to measure the performance of publicly issued U.S. dollar denominated investment-grade debt. The index is part of the S&P AggregateTM Bond Index family and includes U.S. treasuries, quasi-governments, corporates, taxable municipal bonds, foreign agency, supranational, federal agency, and non-U.S. debentures, covered bonds, and residential mortgage pass-throughs.}

^{S&P U.S. Treasury Bond Index:The S&P U.S. Treasury Bond Index is a broad, comprehensive, market-value weighted index that seeks to measure the performance of the U.S. Treasury Bond market.}

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