The Monthly Market Wrap provides an insightful analysis of treasury yields, fixed income performance, mega-cap stocks, and key economic indicators in July 2026. It also delves into housing market data and the performance of commodities.
Key Stock Market Index Performance
Markets posted mixed results in July. International Developed Markets rose 2%, while Emerging Markets fell 3% in the opposite direction. The blue-chip Dow Jones Industrial Average logged a 0.4% increase, the S&P 500 was off a slight 0.1%, and the tech-heavy Nasdaq was the largest laggard for the second straight month, slipping 3.2% in July.
Sector performance was split rather evenly for the second consecutive month, with six of the eleven sectors ending the month higher. Energy led with a 12.1% gain, followed by financials up 6.2% and health care rising 2.5%. Technology was the largest laggard in July, slipping 8%.
Economic Data
Employment
The unemployment rate ticked down 0.1 percentage point to 4.2% in June, the lowest level in one year, and the U.S. economy added 57,000 jobs according to the most recent nonfarm payrolls report, well below the Dow Jones consensus forecast of 115,000.
The US Labor Force Participation Rate decreased another 0.3 percentage points to 61.50% in June, reaching a five-year low.
Inflation vs. Fed Funds Rate
The US inflation rate declined 0.7% MoM to 3.5%, ending a streak of three straight monthly increases and coming off its highest level since May 2023. Core inflation decreased by 0.30% MoM to 2.60%.
The CME FedWatch tool indicates a 64.5% chance that the FOMC will raise the Fed Funds Rate by 25 basis points to 3.75–4.00% during its next meeting on September 16th, with market pricing increasingly reflecting the possibility of additional hikes in the back half of 2026.
Housing Prices and Mortgage Rates
Existing Home Sales declined -2.4% MoM in June, while the Median Sales Price of Existing Homes reached a new all time high of $440,600, an increase of 2.2%, or $9,400, MoM.
Mortgage rates rose gradually in July, with the 15-year rising to 6.04% and the 30-year reaching 6.66%, both as of July 30th. US New Single-Family Home Sales increased MoM by 1.62% in June.
Oil and Gas Prices
Oil prices continued to whipsaw in July as escalating Middle East conflict, blocked shipping lanes, and tighter global fuel supplies re-applied pressure on prices.
Brent crude surged 30.3% in July after plummeting 22.9% in June to $91.82 per barrel as of July 27th. However, Brent remains 33.6% below the high of $138.21 set in early April.
The price of WTI ended July 19.4% higher at $84.25 per barrel and 26.5% its recent high of $114.58 reached in early April.
The higher oil prices added pressure at the pump, with the US Retail Gas Price rising by 26 cents to $4.23 per gallon in July.
Fixed Income
Treasury yields had mixed movements in June as yields on shorter-term treasuries increased while those of longer-term instruments decreased.
The 3-month, 6-month, and 1-year rose 18, 23, and 19 basis points, respectively. The 20-year declined 5 basis points, and the 30-year slipped 8 bps.
Bond funds were up across the board in June, as the iShares 20+ Year Treasury Bond ETF (TLT) led with a 1.2% gain.
Bautis Financial LLC is a registered investment advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial advisor and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.
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