Looking back: global market trends in July 2026
The MSCI World Index (hedged to the Australian dollar) returned 0.3% in July 2026, with considerable variation across sectors and companies, including sharp movements in semiconductor and technology stocks linked to artificial intelligence (AI). Uncertainty relating to the fragile Iran-ceasefire was also watched closely by markets.
US shares were little changed in July, with the S&P 500 broadly flat over the month (-0.1% in local currency). Semiconductor companies led a sharp fall in AI-related companies, while stocks at lower valuations and the broader market performed better. The Federal Reserve held its benchmark rate steady at 3.5% to 3.75%.
European shares generated a modest gain, with the MSCI Europe Index rising 1.0% in July in local currency. This was supported by improving economic data and a shift toward value stocks and sectors that tend to benefit from economic growth. The European Central Bank left its interest rate unchanged, while emphasising that uncertainty remains high and the full impact of the energy shock on inflation is yet to be seen.
Emerging market shares fell in July, with the MSCI Emerging Markets Index (unhedged in Australian dollars) declining 4.3% over the month. The fall was driven by AI-linked chipmakers, which sold off sharply. South Korean shares fell 23.7% in local currency, due to the market’s high exposure to chip and memory producers. These losses outweighed gains in China, Latin America, and parts of Southeast Asia.
Australian shares rose 2.1% over the month, with larger companies performing better than smaller companies. The Energy, Financials, and Health Care sectors led the market higher, with Energy supported by firmer oil prices. These gains were partially offset by falls in Information Technology, Industrials and Utilities sectors. June inflation data came in below expectations. The headline Consumer Price Index eased to 3.8% while the core inflation rate held steady at 3.6%, both over the 12 months to June.
Government bond yields rose across major markets in July. The US 10-year government bond yield increased 0.27 percentage points to 4.71%, while the Australian 10-year yield rose 0.21 percent points to 4.93%. Over the month, Global Fixed Interest (hedged into AUD) returned -0.9% and Australian Fixed Interest returned -0.4%.
The Australian dollar rose 1.4% against the US dollar over July, partially due to broad weakness in the US dollar. The DXY index, which measures the US dollars against six major currencies, fell by about1.3% over the month. Most other developed market currencies, most rose against the US dollar.
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SuperRatings Fund Crediting Rate Survey, July 2026. The information is current as at the date of the SuperRatings Survey (released on 21 August 2026). Refer to superratings.com.au for further information about these results. Investment returns are only one factor to be considered when deciding whether to invest. Past performance is not a reliable indicator of future performance. Returns are based on daily unit pricing valuations and are net of external investment manager fees, net of taxes and gross of all Brighter Super administration fees for all performance periods.
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