July 2026 Market Update

July 2026 Market Update From Michael Furey: AI’s Big Year, and Why We’re Keeping Our Feet on the Ground

If the first quarter of the year had a bit of grumpy energy, Q2 was the sunny reboot. Markets ran hard right through to the end of June, and it’s been almost entirely the AI story. Artificial intelligence is the boom of the moment, and it’s been dragging share markets along for the ride.

Oil, inflation, and the “will they, won’t they” on rates. Renewed tensions overseas have pushed oil prices up, and if that keeps going, it tends to flow through to higher inflation. Meanwhile, the Reserve Bank lifted rates through the first half of the year, leaving the cash rate sitting at 4.35%. Markets are now split roughly 50/50 on whether we get one more hike later in the year, but there’s no early sign of cuts just yet. Think of it like a lift that’s stopped climbing but hasn’t decided to come back down.

US shares are looking… expensive. We flagged this last quarter, and it’s still true for the July 2026 market update. A lot of that AI enthusiasm has been priced into US equities, which makes them a pricey place to be shopping right now.

So, what does that mean for how we invest? In short: we’re staying at the party, but we’re not the ones ordering the most expensive bottle on the menu. We’re staying invested — this is not a “run for the exits” moment — but we’re leaning towards cheaper value stocks and staying a touch underweight on those expensive US equities. It’s a defensive, patient approach, and one we’re very comfortable with for the long term. This is exactly the kind of thinking that shapes our investment planning approach, and it’s why keeping a cool head — a bit of behavioural finance discipline — matters more than chasing whatever’s hot.

If you’d like the wider picture, our June economic snapshot digs in further, and you can always book a chat with the team if you’d like to talk through what any of this means for your own financial plan.