July 2026 market update

July was a mixed month for markets, with geopolitical tensions and trade disputes creating uncertainty.

• Middle East: Renewed fighting between the U.S. and Iran disrupted shipping through the Strait of Hormuz, causing oil prices to jump 22% in July. This raises concerns that inflation could start climbing again.
• Canada: The Canadian stock market performed well, rising 1.1% in July and 11.1% so far in 2026, helped particularly by energy stocks. However, new U.S. tariffs on Canadian goods create a significant risk to Canada's economic growth.
• U.S.: Inflation had been cooling, but higher oil prices could reverse some of that progress. The U.S. economy grew 1.5% in Q2, slower than the previous quarter. The Federal Reserve left interest rates unchanged at 3.5%–3.75%.
• Europe: Inflation fell somewhat and the economy grew modestly, but inflation remains above the ECB's 2% target. The ECB also left rates unchanged.
• Investments: Canadian and international developed-market stocks did reasonably well, while U.S., emerging-market and Asian stocks fell in July. Bonds also declined as government bond yields rose.
• Big picture: The main concern is that higher oil prices and tariffs could push inflation back up, while at the same time economic growth is slowing. Central banks therefore have to balance fighting inflation against supporting economic growth.

The Bottom Line

The following article isn't predicting a crash. It is highlighting that the economic environment has become more uncertain, with geopolitical conflict, oil prices and tariffs being the biggest near-term risks. Despite that, markets—especially Canadian equities—have had a strong year so far.

To read the full update, including data tables and detailed commentary, visit the full article on Canada Life: Monthly Market Update – July 2026.