The market at a glance: Everybody wants to rule the world

While summer typically coaxes global markets into a quiet, predictable rhythm, this July has been anything but restful. Between major geopolitical power plays in the Strait of Hormuz and a relentless race for AI dominance, it seems that everybody wants to rule the world.

We dive straight into how equity markets are managing to shrug off geopolitical heat to keep pushing forward, even as bond markets face a volatile storm of surging oil prices and central bank transitions. Finally, discover how our own balanced portfolios navigated this shifting landscape to deliver a robust net return of +4.70% in the first half of 2026.

Enjoy the read.

The market at a glance: Everybody wants to rule the world

Song of the month*: “Everybody wants to rule the world” by Tears for Fears

Summer is in full swing, mails are getting answered by moderately funny “out of office” message, and this usually is also accompanied with the well-know “summer lull” on global markets. Everyone is on their best behaviour, and so are the markets.

Not so much this year however: from the football worldcup to serious topics like the war in Iran, delegations from all over the world were contending to showcase who would rule over the world for the upcoming years. Whilst Spain might have settled the debate on the football court, the delegations in and around the straight of Hormuz are nowhere near a resolution, and this was repercussed on markets.

Key takeaways

• The Hormuz straight, that everybody wants to rule

• Equity markets are not experiencing the same tensions and still going strong, carried by a lasting AI enthousiasm - a race that a few players are also aiming to win

• Elsewhere, however, from bond markets to commodities and digital assets, volatility crept back into the picture

What happened with equities

The equity markets were relatively flat for the month of July, US equity markets have continued to rise, buoyed by the ongoing enthusiasm for artificial intelligence. However, caution is warranted given the very high valuations in the technology sector, which will, by definition, have a negative impact on future returns.

A similar trend could be observed in Europe and Asia, although inflationary tendencies tainted market movements. The instability in the Middle-East, combined with a highly awaited earnings season, provoked a slight downards tendency in the middle of the month, talk about holding hands whilst the walls come tumbling down.

What happened with bonds

The bond market spent July looking anxiously at the horizon, as geopolitical tremors in the Middle East began to translate into stubborn macroeconomic realities. A 31% surge in oil prices has reignited fears of a second wave of energy-driven inflation, pushing US Treasury yields steadily upward. The 10-year note hit an 18-month high of 4.71%, a far cry from the calmer ranges of earlier this spring.

This hostile backdrop sets a dramatic stage for Kevin Warsh’s second FOMC meeting on July 29th. The new Fed Chair, who took office promising structural reform and less predictable "forward guidance," now faces a market that is rapidly losing its patience. Traders are expecting a September hike climbing past 78%. Warsh’s honeymoon period with the markets may prove remarkably short.

Across the Atlantic, the European Central Bank chose to play it safe. Having already acted preemptively in June with a 25-basis-point hike to counter these exact energy risks, the Governing Council held its key rate steady at 2.40% yesterday (July 23). Frankfurt is clearly in "wait-and-see" mode, refusing to commit to any preset rate path while they assess how deeply the oil spike will bleed into core inflation.

For fixed-income investors, the message is clear: the era of policy inertia is over, and volatility is firmly back on the menu

What happened with commodities, currencies, and digital assets

The global race to rule the world (or at least the straight of Hormuz) highly influenced commodity prices. The resumption of hostilities between Iran and the United States has shattered the memorandum of understanding signed by the two parties on 17 June, and has been one of the main factors driving volatility in the financial markets. Following several weeks of calm and the announcement of talks aimed at ensuring safe navigation through the Strait of Hormuz, the strikes, retaliatory actions and exchanges of threats have reignited investors’ concerns. The question remains as to whether, once reopened, the Strait of Hormuz will become a toll passage, effectively a de facto privatisation, which would, on the one hand, have significant economic and political implications, and, on the other, might give other states bordering straits and canals of global importance ideas of their own.

Cryptos on the other hand had a glorious month, with the Bitcoin climbing steeply, and most other stablecoins following a similar trend. This pattern can be not only linked to a contamination coming from the AI optimism on the equity market, but also to a run to safety from investors who on the other hand were wary about potential bubble burst.

Everyone wants to rule the world and it is dragging the markets into this race, it might feel at times as if we are only bystanders, but we can only use this as a reminder to readapt our portfolios and investment strategies to both accomodate personal needs and global macro events, because nothing ever lasts forever, and even the most dire of conflicts will resolve.

Promotion: Our portfolio performance (+4.70% in H1)

In a world where everybody wants to rule, managing your wealth can sometimes feel like a high-wire act. The first half of 2026 has tested even the most seasoned investors, swinging between the fear of sudden market drops and the nagging anxiety of missing out on the AI rally.

Through it all, our active portfolios have kept their steady stride.

In the first half of 2026, the Alpian Balanced Portfolio delivered a net return of +4.70%, outperforming our benchmark (the Performance Watcher Mid-Risk Index, which stood at +2.92%) by +1.78%.*

This outperformance did come with slightly higher volatility, 7.93% for Alpian compared to 6.63% for the benchmark. However, when adjusted for this volatility, our active approach has successfully captured meaningful upside while keeping a firm grip on risk.

Building a financial strategy isn't about chasing short-term hypes; it's about creating a robust, personal design that stands the test of time.

^{*Performance of the Alpian Balanced Portfolio Compared with the PW Mid-Risk Index (31 December 2025 – 17 June 2026). The average performance of Swiss banks for a balanced strategy is represented by the Performance Watcher Mid-Risk Index. For Alpian, we display the average performance of discretionary portfolios following a balanced strategy (40–60% equity allocation). All performance figures reflect the aggregate time-weighted return, net of fees, across all Alpian clients with a balanced strategy. Individual investment results may vary due to factors such as investment timing and specific strategy choices. Past performance is not indicative of future results. The content of this publication is provided for informational purposes only and should not be interpreted as legal, tax, investment, financial, or other professional advice.}

^{The performance of Alpian (4.70%) is higher +1.30 compared to the one of the benchmark (2.92%). This performance and the benchmark doesn’t include the volatility. Alpian’s volatility is of (7.93%) and higher than the one of the benchmark (6.63%). To assess the quality of the performance (4.70%), Performance Watcher adjust it for its volatility and compare it to the performance of the benchmark (2.92%).}

^{Investments involve risks, including the possible loss of invested capital. The value of investments can fluctuate and there is no guarantee of making profits or avoiding losses. Diversification does not ensure a profit or protect against a loss. Potential investors should consult a qualified financial advisor before making any investment decisions. Please read the full risk warnings and other relevant documents on our website before investing.}