Market Brief — July 20, 2026

US equities ended mixed, with the S&P 500 (SPX) down 0.2%, the Dow Jones Industrial Average (DJIA) off 0.6%, and the Nasdaq Composite (^IXIC) roughly flat as a rebound in large-cap chips limited index losses despite higher energy prices and macro uncertainty. In Europe, the FTSE 100 (UKX) fell 0.7% while the DAX (DAX) and CAC 40 (FRA40) were little changed, reflecting cautious risk appetite ahead of central-bank meetings and elevated oil-driven inflation concerns. Asian markets outperformed, with the Shanghai Composite (000001.SS) up 0.9% and the Hang Seng (HSI) gaining 2.4% as Chinese policy support signals and AI-related optimism buoyed regional risk assets.

Global inflation data remained supportive of a cooling narrative as US headline CPI slowed to 3.5% year-on-year in June versus 3.8% consensus, core CPI eased to 2.6% with a flat month-on-month print, US PPI fell -0.3% m/m against a flat expectation, and Canadian CPI for June came in at 2.8% YoY versus 3.2% prior, 2.9% consensus, and a 3.0% forecast. Markets priced an 84% probability that the ECB will keep the deposit rate at 2.25% at its July meeting and the People’s Bank of China left the 1-year and 5-year Loan Prime Rates unchanged at 3.00% and 3.50%, while an oil-led repricing pushed Brent (UKOIL) about 3.3% higher toward $91, lifted the US dollar index roughly 0.2% toward 101, drove the US 10-year yield toward 4.6%, and left gold slightly softer near $4,008 per ounce. China pledged to meet its full-year growth target after Q2 GDP slowed to 4.3% YoY and signaled more active fiscal support, while breakthroughs in multi-trillion-parameter AI models from domestic platforms spurred rotation into Chinese AI and cloud-related equities.

Nvidia (NVDA +1.9%) and other chip names rallied, helping the S&P 500 (SPX) slip only 0.2% while the Nasdaq Composite finished nearly unchanged and the Nasdaq-100 added about 0.04%, even as a Goldman Sachs prime-services report said hedge funds had reduced US technology positions by roughly 10% over the past two months, with selling concentrated in semiconductors, memory, and AI-infrastructure stocks. Geopolitical headlines around Yemen’s Houthi rebels declaring a naval blockade of Saudi Arabia and reports of tanker attacks drove a fresh repricing in energy and shipping, as Brent crude (UKOIL) briefly traded above $90 and settled at $90.85 per barrel, up 3.12% on the day, and war-risk insurance premia on key routes climbed from about 0.3% to roughly 0.75%. Policy and legal risk also featured as the United States issued three proclamations imposing additional 50% tariffs on a broad range of Canadian imports under Section 338, coinciding with a modest slide in the Canadian dollar, while a US judge ordered a 14-day temporary restraining order on the Paramount-Skydance acquisition of Warner Bros. Discovery that could trigger more than $600 million per quarter in ticking fees if closing is delayed past September 30. Truelink Capital completed its acquisition of Lyons Magnus, a developer and manufacturer of specialty ingredients, beverage, and nutrition solutions, while Galaxy Gaming said it is evaluating its options after the July 17, 2026 merger outside date passed without all regulatory closing conditions being satisfied or waived. Brookfield and CPP Investments agreed to acquire LXP Industrial Trust in a $5.2 billion all-cash transaction, and Siemens, Thesis Elements, and SmartProperty each announced technology-focused acquisitions alongside NNS building its stake in OCI and Schouw & Co. disclosing a share buy-back programme.