Please see below the daily update article from Brooks Macdonald, received this morning – 08/07/2026
What has happened?
Markets struggled yesterday as higher oil prices revived concerns about stagflationary. Government bonds bore the brunt of the move, with the US 10-year Treasury yield rising 8.2bps to 4.55%, while the S&P 500 fell -0.45%. The Philadelphia Semiconductor Index dropped -4.7%, leaving it -16% below its mid-June peak despite having just recorded its strongest quarter on record in Q2. Higher energy prices prompted a rotation towards defensive areas, with the energy (+3.0%) and healthcare (+1.6%) among the strongest performers. Despite the weakness in headline indices, market breadth was more resilient, with 283 S&P 500 constituents finishing higher. In Europe, rising oil prices also weighed on sentiment, pushing bond yields higher and leaving the STOXX 600 down -0.65%. French politics attracted some attention after Marine Le Pen confirmed her intention to run in the 2027 presidential election, although the immediate market reaction was limited.
Oil jumps as Middle East tensions escalate
Overnight, investors were confronted with a significant escalation in US-Iran tensions. American forces launched strikes against more than 80 targets in Iran, including air defence systems, command-and-control facilities and anti-ship missile capabilities, following attacks on commercial shipping in the Strait of Hormuz. The US Treasury also revoked a waiver that had permitted new Iranian oil sales, a move that risks undermining the interim peace agreement reached last month. Brent crude, which had already risen more than 5% yesterday, traded near $76 /bbl this morning after gaining a further 2% overnight. Iran has condemned the actions and vowed a response.
What does Brooks Macdonald think?
The latest escalation represents the most serious challenge yet to the ceasefire and a reminder that geopolitical risks can re-emerge quickly after fading from investors’ attention. Elsewhere, the NATO summit continues for a second day. President Trump reiterated that the US could withdraw military forces from Europe and repeated his desire for Greenland to come under US control, while reports suggest that more than $50bn of defence-related agreements have been announced around the summit. Together, these developments reinforce a broader theme that has become increasingly evident in recent years: geopolitical considerations are playing a larger role in shaping fiscal priorities and, ultimately, investment opportunities.
Bloomberg as at 08/07/2026
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Cherise Lancaster
08/07/2026