Global Asset Allocation Team Market Update – July 2026

Global equity markets (-0.9%) lost some momentum in June. The S&P 500 (-1.1%) retreated, with malaise in the tech space spreading to the Magnificent Seven group of stocks (-8.8%) that represent one-third of the index. By contrast, the S&P/ TSX (+0.3%) advanced on the back of solid performance in the heavyweight financials sector (+8.6%) that offset lacklustre results in the energy (-4.6%) and materials (-12.2%) space. Elsewhere, the MSCI EAFE was unchanged, while the MSCI gauge of emerging market stocks (-1.7%) pulled back on concerns over excessive investment in AI.

Fixed income markets inched higher. Treasury yields rose as a growing chorus of Federal Reserve officials pivoted towards a hawkish stance amid mounting inflationary risks. In response, the market consolidated around the view that the next move will be a rate hike. Canadian government bond yields edged lower following a benign reading on core inflation and the sharp drop in oil prices. That prompted traders to dial back their wagers for Bank of Canada rate hikes this year. For the month, the Bloomberg US Aggregate Bond Index rose 0.2% – while the FTSE Canada Bond Universe advanced 0.5%.

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