Weekly Market Review - 13-07-2026

Jul 13
5 min read

Updated: Jul 14

Markets edged lower this week as renewed US-Iran hostilities pushed energy prices higher and revived inflation concerns. While the S&P 500 remained broadly stable, UK equities came under greater pressure. Elsewhere, America’s AI infrastructure boom began feeding through to technology and electricity costs, the ECB reassessed its interest-rate outlook, and attention turned to the economic impact of extreme heat and Europe’s simplified sustainability reporting rules.

Market Recap.

Equity markets edged lower over the week, although losses across US markets remained relatively modest.

UK equities recorded the weakest performance, with the FTSE 100 ETF falling 1.25%.

In the United States, the Dow Jones Industrial Average ETF declined 0.83%, while technology stocks also moved lower, with the Nasdaq 100 ETF falling 0.56%.

The broader S&P 500 ETF was virtually unchanged, slipping by just 0.09% over the week. This suggests that, despite some weakness across individual areas of the market, overall investor sentiment remained relatively steady.

News.

With further heatwave conditions forecast, attention is turning to the economic effects of extreme heat. The May and June heatwaves were linked to an estimated 2,700 premature deaths across England and Wales. Higher temperatures can also reduce output in outdoor and manual roles, cause supermarket refrigeration failures, increase electricity demand for fans and cooling, and force school closures that leave working parents needing time off.

Proposals for a maximum workplace temperature could create further requirements for employers. Meanwhile, government analysis warns that climate damage and lower labour productivity could reduce UK GDP by 3.00% to 4.00% by 2050, rising to 7.00% to 8.00% by 2070. The immediate effect of the latest heatwave remains to be seen, but the economic risks are expected to increase as temperatures rise.

Inflation.

America’s rapid AI buildout is creating inflationary pressure across technology, energy and consumer goods. Alphabet, Amazon, Meta and Microsoft are expected to invest around $720 billion this year, largely in data centres. The resulting demand for semiconductors has tightened supplies, with JPMorgan estimating that some memory-chip costs could rise by as much as 400% between 2024 and the end of 2026.

Consumers are already seeing the effect. Apple has raised prices for some laptops and iPads by 15%–25%, while Microsoft is adding $100 to the price of its Xbox console. Electricity prices also rose 5.90% year on year in May, compared with headline inflation of 4.20%, as data centres place greater demands on the power grid.

Economists estimate that AI investment could add around half a percentage point to core inflation this year. With core PCE at 3.40%, the pressure could influence Federal Reserve interest-rate decisions and borrowing costs.

Central Banks.

The European Central Bank faces renewed uncertainty after fresh hostilities between the United States and Iran pushed energy prices higher again.

ECB policymaker Yannis Stournaras said the Bank was “back to square one” in its fight against inflation, highlighting how quickly the outlook has changed. Falling energy prices following the earlier peace agreement had reduced pressure for another rate rise at the ECB’s meeting on 22–23 July.

However, investors have increased their expectations for further tightening as the conflict has resumed. Markets now anticipate two additional rate rises over the next year as policymakers try to prevent higher fuel costs from feeding into wider inflation.

Commodities.

Oil prices surged over the week as renewed tensions between the United States and Iran heightened concerns over potential disruptions to energy supplies and shipping routes through the Strait of Hormuz. WTI crude rose 8.0% to around $74.00 per barrel, while Brent crude gained 9.2% to approximately $78.50 per barrel.

In contrast, precious metals came under pressure from a stronger US dollar and renewed inflation concerns. Gold fell 2.4% to around $4,060 per ounce, while silver declined 5.8% to approximately $58.50 per ounce.

ESG.

The European Commission has adopted simplified European Sustainability Reporting Standards, aiming to reduce the cost and complexity of corporate ESG reporting.

The revised standards will cut mandatory data points by 60% and reduce the total number by more than 70%. The Commission estimates that the changes could lower reporting costs by around 30% per company.

A voluntary standard has also been introduced for smaller businesses outside the scope of the Corporate Sustainability Reporting Directive, limiting the information larger companies can request from their supply chains. The revised standards will now be reviewed by the European Parliament and Council before taking effect.

Geopolitics.

Tensions between the United States and Iran have escalated despite recent peace talks aimed at securing a longer-term agreement.

Iran launched further attacks on US military facilities across several Gulf states following another wave of American strikes against Iranian targets. Tehran also warned that further incidents could occur in the Strait of Hormuz as it seeks greater control over shipping through the strategically important waterway.

The renewed fighting threatens the fragile interim agreement reached in June. However, diplomatic efforts involving Qatar, Pakistan and Egypt are reportedly continuing. Markets remain focused on whether negotiations can prevent further disruption to regional energy supplies and international shipping

Week Ahead.

United States

In the United States, inflation will be the main focus. June CPI and Core CPI figures are released on Tuesday 14 July, followed by Producer Price Index data on Wednesday 15 July.

Federal Reserve Chair Kevin Warsh will also testify before Congress on Tuesday and Wednesday, with markets watching for comments on inflation and the outlook for interest rates. The Federal Reserve’s Beige Book is published on Wednesday.

June Retail Sales and weekly Initial Jobless Claims are due on Thursday 16 July. The week concludes on Friday 17 July with Industrial Production, Housing Starts and the preliminary University of Michigan Consumer Sentiment Index for July.

United Kingdom In the UK, the main economic releases arrive on Thursday 16 July. The ONS will publish its monthly GDP estimate for May, alongside updates on industrial production, services, construction output and UK trade.

The figures will provide an important indication of economic momentum during the second quarter and whether activity strengthened following recent uncertainty around inflation, energy prices and consumer demand.

Eurozone

Across the Eurozone, attention will turn to production and inflation data.

Industrial Production figures for May are released on Wednesday 15 July, providing an update on the health of the region’s manufacturing sector.

The main focus comes on Friday 17 July, when Eurostat publishes final June inflation figures. Markets will assess whether the final reading confirms the earlier estimate and what it could mean for the European Central Bank’s interest-rate outlook.

It is important to note that the geopolitical situation remains highly fluid, and developments are changing rapidly. As such, the outlook may shift quickly as new information emerges.