July was a relatively weak month across the board for equities. Below are the July returns for the popular benchmarks that investors track (Data provided by Y-Charts & Commonwealth Financial Network):

S&P 500 Index: -0.1%
Dow Jones Industrial Average: +0.3%
Nasdaq Composite Index: -3.2%
Russell 2000 Index: -3.1%
S&P Target Risk Moderate: -0.76%

Geopolitical developments returned to the forefront in July, reminding investors that markets must periodically contend with unexpected global events. Renewed military strikes and escalating tensions pushed energy prices higher, even after initial ceasefire agreements had suggested the conflict was easing.

One area receiving significant attention is the Strait of Hormuz, a vital shipping lane through which approximately 20% of the world’s oil supply passes. While markets have historically demonstrated resilience through geopolitical events, any prolonged disruption to global energy supplies could place upward pressure on inflation and introduce additional volatility into financial markets. These renewed geopolitical concerns come at a time in the calendar when stock performance tends to be weak.

As we move into the late summer months, it’s worth keeping historical market seasonality in mind. August and September have traditionally been among the weakest months of the year for U.S. equities, with September producing the lowest average monthly return for the S&P 500 over the past two decades (Source: StockCharts.com). Of course, seasonal trends are tendencies, not forecasts, and 2026 has already demonstrated that markets don’t always follow historical patterns. Still, understanding these longer-term tendencies can help investors maintain realistic expectations following a strong first half of the year and avoid overreacting to normal market fluctuations.

Corporate earnings season is well underway, with many of the world’s largest publicly traded companies having already reported second-quarter results. As is often the case during earnings season, individual stock volatility has increased as investors evaluate whether companies are meeting, exceeding, or falling short of expectations. Results have been mixed overall, and the market has generally rewarded companies delivering strong earnings while responding swiftly to those that have disappointed. Combined with ongoing geopolitical uncertainty, this environment has contributed to elevated day-to-day market volatility, even as the broader economic backdrop remains relatively constructive.

Our broader outlook remains unchanged from the start of the year. Periods of seasonal softness are normal, and they often create opportunities for disciplined, long-term investors who stick to a well-defined plan. Patience and discipline remain key.

As always, don’t hesitate to contact our team with any questions.