What Happened in the Markets in July 2026

Last Month in the Markets: July 1^st – 31^st, 2026

Index returns based on index value (source: Bloomberg https://www.bloomberg.com/markets, MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis.  Price returns are reflected)

What happened in July?

As many expected the U.S./Iran war continues to occupy much of the attention for political and economic news and remained influential for markets.  On July 8^th, President Trump declared that the ceasefire was over after renewed military attacks, including drones and missiles, between the two countries.  Iran launched strikes against U.S. interests across the region, and the U.S. responded by with attacks on nearly 150 targets.  The blockade of Iranian ports was reimposed on July 14^th, and Trump threatened to impose fees for ships in the Strait of Hormuz.  On July 17^th and 18^th, 4 U.S. service members were killed.  On July 26^th the Pentagon updated its casualty calculations and process, while reporting 18 deaths and 624 wounded.  Synopsis of key dates

By now, everyone is familiar with the effects of this conflict on the price of oil.  After some diplomatic progress the military escalation reignited price increases beginning on July 7^th and peaking on July 23^rd.  Despite price declines at the end of the month, the price of oil is more than 20% above prices in February prior to the bombing of Iran began six months ago. For families seeking professional wealth management in Calgary, understanding what drives market returns, and how those developments impact your long-term financial plan, is where working with a trusted Personal CFO can make all the difference.

What’s ahead for August and beyond?

Until the conflict in the Middle East subsides and reaches a stable peace, uncertainty and volatility will remain in markets. Eventually, the higher price of oil will become imbedded and change the course of corporate and economic growth, and longer-term inflation.  The Bank of Canada and Federal Reserve will likely change course for interest rates if inflation remains high into the fall and winter.  The predictions have increasingly turned to rate hikes for the Fed according to CME's FedWatch tool.  

Events that influenced markets in July included:

         (source: Bloomberg https://www.bloomberg.com/marketsand ARG Inc. analysis)

1.   June 30^th – The growing Canadian economy led us into July

Real gross domestic product (GDP) grew 0.5% in April, after contracting 0.1% in March, on strength in both goods-producing (1.2%) and services-producing industries (+0.3%).  The sectors driving growth were mining, quarrying, oil and gas extraction, the public sector and transportation and warehousing.  StatsCan GDP release

2.   July 2^nd – U.S. jobs grew modestly

According to the U.S. Employment Situation Summary, total nonfarm employment grew by 57,000 in June.  Most of the growth came from professional and business services (+36,000), social assistance (+25,000) and healthcare (+22,000).  CNBC and EmpSit

3.   July 7^th – Canada’s trade surplus grew almost 25% and U.S. trade deficit jumped in May

The merchandise trade surplus widened to $4.2 billion in May from $3.4 billion in April as exports grew more than imports.  It was the third consecutive month with a trade surplus.  StatsCan release

The U.S. trade deficit widened to $77.6 billion in May up from $54.6 billion in April, a 42% increase.  The deficit grew as exports from the U.S. fell 3.2% and imports to the U.S. increased 3.3%, which accounted for the widening, net-negative trade gap.  BEA trade release   CNBC

4.   July 8^th – U.S./Iran ceasefire ended

After much disagreement whether full negotiations were underway, and after many rounds of bilateral attacks between the two countries, President Trump declared that the ceasefire had ended.  Indications that diplomatic communications continued.    Politico and ceasefire  

5.   July 10^th – Canadian jobs and unemployment rate improved slightly in June

StatsCan released its Labour Force Survey for June that showed employment increased slightly, up 18,000, and the unemployment rate declined by 0.1 percentage points to 6.5%.  Employment increased for youth and core aged people while the number of jobs for older Canadians fell.

6.   July 14^th - U.S. inflation slowed in June compared to May and remained above goal

On a month-over-month basis U.S. inflation reversed in June.  The Consumer Price Index decreased 0.4% in June after rising 0.5% in May.  On an annual basis it has slowed.  Over the last 12 months, the all-items index increased 3.5%.  In May, the year-over-year consumer inflation rate was 4.2%.  Much of the change in the headline rate is attributed to the 5.7% fall in the index for energy in June compared to 3.9% increase in May, 3.8% in April and 10.9% in March.  The all-items index less food and energy was unchanged between June and May at 2.6%. BLS release  CNBC and CPI

7.   July 15^th – Bank of Canada held rates unchanged and released its Monetary Policy Report

The Bank of Canada maintained its overnight rate at 2.25%, the Bank Rate at 2.5% and the deposit rate at 2.20%.  The rates were last changed on October 29, 2025, when they were lowered to their current levels, and have remained unchanged after six subsequent interest rate decisions.  In the most recent decision, the Bank noted higher oil prices, slowing global Gross Domestic Product growth, “choppy” Canadian GDP growth, buoyant global equity markets, risen U.S. bond yields, solid consumer spending, and higher consumer inflation levels domestically and around the world.  

The Bank of Canada also released its Monetary Policy Report (MPR) that reiterated the situation described above.  It included, “The evolution of Canada’s trade relationship with the United States and the war in the Middle East remain the two most important risks to the outlook for inflation.” BoC announcement   CBC and Boc

8.   July 20^th – Canadian consumer inflation slowed in June compared to May

Canadian’s consumer prices increased 2.8% in June on a year-over-year basis after May’s reading of 3.2%.  Excluding gasoline from the inflation calculations, the Consumer Price Index (CPI) in June and May was unchanged at 2.2%.  StatsCan CPI release

9.   July 29^th – Fed holds benchmark rate unchanged

The Federal Reserve held its federal funds rate steady in a range of 3½ to 3¾ percent.  Although employment growth and unemployment are satisfactory, the rate of consumer inflation had 3 of its 12 committee members vote for a rate increase.  Fed announcement  CNBC and Fed  

10. July 30^th – U.S. inflation far above 2% target, GDP growth slowed

The Federal Reserve’s preferred inflation indicator, the Personal Consumption Expenditures Price Index (PCE) has risen 3.7% compared with June 2025.  Excluding food and energy, Core PCE, rose 3.3%, both topline and core inflation are well above the Fed’s 2% target.  PCE release

U.S. Gross Domestic Product (GDP) rose 1.5% on an annualized basis in the second quarter, which is a slow-down compared to Q1 2026. GDP release

11. July 31^st – Canadian GDP rebounded for second consecutive month

In Canada, GDP grew 0.3% in May, the second consecutive month of growth as both goods and services industries expanded. The increase was led by mining, quarrying and oil and gas extraction for the last two months.  The government, construction, real estate, rental and leasing, manufacturing, finance and insurance, transportation and warehousing were among the sectors delivering increased levels of economic activity.  StatsCan GDP release

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