Podcast
How Are We Thinking About Markets Right Now?
Will Simpson and Greg Wise
August 4, 2026
After a bumpier July, we look at the risks and opportunities shaping the months ahead and how we are positioned for what comes next.
Markets were a bit choppy this week, but most major indexes still finished in positive territory. The S&P 500 gained 0.6% in Canadian-dollar terms, while the Nasdaq rose 1.1%. International markets were also generally stronger, with Europe advancing and Japan benefiting in Canadian-dollar terms from a stronger yen. Canada slipped 0.4%.
Earnings were a big part of the back-and-forth, particularly across technology, but the season has been very strong overall. A little over half of the S&P 500 has now reported, with aggregate earnings growth of 57% and earnings coming in 31% above expectations. The interesting part, as highlighted in our chart of the week, is that the more AI exposure a sector has, the softer the market reaction has tended to be following earnings.
The Fed also delivered plenty of tough talk without much action. Rates were left unchanged, but Chair Warsh maintained a firm tone on inflation and appeared comfortable allowing higher market yields to do some of the tightening for now. That helped push longer-term yields higher, with the U.S. 30-year moving above 5.25% and the 10-year climbing past 4.7%. Only two meetings into Warsh’s tenure, markets are still trying to determine how much weight to put on his hawkish messaging when it has not yet been followed by policy action.
Taken together, this doesn’t mean that the market cycle is over, but it might be signalling a more selective environment ahead. After several strong years for growth and technology, higher rates and changing market leadership are strengthening the case for diversifying beyond growth-oriented investments.
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