Global performances were mixed in July with AI-related stocks once again correcting as elevated valuations came under closer scrutiny. Energy was the strongest-performing sector. It benefited from higher oil prices as a re-escalation of the conflict involving Iran raised concerns about potential further disruptions to global energy supplies. The month was marked by a rotation away from some high growth parts of the market that have previously performed well, and towards some lower valued sectors. As a result in the United States the Dow Jones index once again outperformed the tech-heavy Nasdaq, gaining a modest 0,32% while the Nasdaq dropped 3,20%. The overall S&P500 fell a modest 0,13%.

In Europe stock indices were mostly positive with the German DAX adding 2,53%, the French CAC index adding 1,26% and the overall Eurostoxx 50 adding 0,47%. The information technology sector fell sharply, in part due to concerns over competitive threats from Chinese companies to some of Europe’s leading manufacturers of chip making equipment. Utilities and health care also posted negative returns. Energy was the top gainer while the heavyweight financials sector also outperformed following some well-received quarterly results from certain banks.

The Slovene SBI top index was one of the top performers, adding 7,72% to close July at 3222. Also UK's FTSE index gained an impressive 3,53%. The UK’s higher weighting to the outperforming energy sector was in its favour amid another rise in oil prices. The financials sector also performed well.

As expected, the US inflation numbers came down considerably in June as the oil price took a 20% hit that month on hopes of a peace deal with Iran. However with the war escalating again and the Strait of Hormut still closed, oil regained the loss in June and closed at almost 85 dollars per barrel again by the end of July. The ECB, BOE and FED kept the interest rates unchanged as inflation remains their primary concern.

Precious metals remained quasi unchanged after their sharp correction over the previous months with gold remaining above 4000 dollars per ounce. The dollar lost 0,93% to 1,1528$/EUR.

Emerging market (EM) equities posted negative returns in July. The AI-led rally that has driven EM performance throughout much of 2026 showed further signs of fatigue as Korea and Taiwan led EM lower. Following the Korean market’s surge in performance throughout most of 2026, July was characterised by significant volatility, ending the month as the worst performing EM market.

China was the strongest performing major EM, benefiting from the shift in investor positioning out of Korea and Taiwan, with banks and internet names among the primary beneficiaries. Economic activity remains weak, however.

Rudy Marchant

Fund manager OTP Skladi

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