Dear clients and friends,

At Perseus Wealth, we believe that understanding the market is crucial to informed investment decisions and that these are the critical topics of conversation that deserve attention this month. We value your insights and would be delighted to participate in further discussions if you have any questions or require additional details.

What’s Happening: The second half of 2026 opens with markets balancing three competing forces: renewed U.S.-Iran hostilities, the first meaningful inflation relief in months, and the start of second-quarter earnings season. Stocks entered July with considerable momentum after the S&P 500 and Nasdaq posted their strongest quarters since 2020, while the Dow notched back-to-back record closes in the opening days of the month. That optimism was quickly tested when the June ceasefire between the U.S. and Iran unraveled, reviving the energy shock that had pushed inflation higher through the spring. By mid-July, however, cooler inflation data and strong early earnings results has helped move the major indexes back to within roughly 0.5% of their records.

The renewed hostilities rippled first through energy markets. Brent crude oil, which had retreated sharply toward pre-war levels during the June ceasefire, climbed above $76 a barrel following fresh strikes and recently approached $85 as the conflict intensifies since the Strait of Hormuz handles oil flows equivalent to roughly 20% of the world’s oil supply. Sector leadership has shifted as well: semiconductor shares remain volatile as investors weigh profit-taking against still-robust demand tied to artificial intelligence; financial shares benefited from strong bank earnings, driven by record trading and investment banking revenue. FactSet estimates that S&P 500 earnings will grow roughly 23% from a year earlier in the second quarter, a pace that would provide important support for elevated stock valuations[1].

The economic calendar is reinforcing the shifting narrative. The June jobs report showed employers adding just 57,000 jobs, well below the 115,000 consensus, while revisions removed 74,000 jobs from the initial April and May reports2. Although unemployment edged down to 4.2% from 4.3% in May, it appears largely due to labor force participation falling to 61.5%, the lowest since March 2021[2]. Inflation brought encouraging, if potentially temporary, news: The Consumer Price Index (CPI) fell 0.4% in June, its largest monthly decline since April 2020, as energy prices dropped 5.7%3. Annual inflation slowed to 3.5% from 4.2% in May, below the 3.8% consensus forecast3. Core CPI, which excludes food and energy, (and was therefore not influenced by reduced energy costs) was unchanged at 2.6% compared to a year earlier[3] but still above the Fed’s target of 2.0%. The Producer Price Index (PPI)  declined 0.3% in June, trimming the odds that the Federal Reserve might raise interest rates at its July 28-29 meeting[4].

The Bottom Line: The coming weeks will test whether the current scenario holds: Earnings season will expand to sectors beyond financials, the Fed will meet again at month-end and the path of the Iran conflict will help determine whether June’s energy-driven headline disinflation extends into the summer or proves to be a one-month reprieve. For now, resilient corporate earnings are giving investors some reason to look through geopolitical uncertainty, but the recent rise in oil prices, increasing pressure on international oil reserves and renewed lack of access to critical chemicals needed for growing food may mean inflation risks have not fully faded.

Best always,

Sean and John

The opinions expressed in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and does not guarantee future results. All indices are unmanaged and may not be invested directly. The economic forecasts outlined in this material may not develop as predicted, and there can be no guarantee that any strategy will be successful.

[1] FactSet, https://insight.factset.com/sp-500-likely-to-report-earnings-growth-above-29-for-q2
[2] Bureau of Labor Statistics, https://www.bls.gov/news.release/empsit.nr0.htm
[3] Bureau of Labor Statistics, https://www.bls.gov/news.release/cpi.nr0.htm
[4] Bureau of Labor Statistics, https://www.bls.gov/news.release/ppi.nr0.htm