Weekly Market Review - 27-07-2026

Jul 27
4 min read

UK equities led a broadly positive week for markets, although technology stocks remained under pressure. Extreme heat and wildfires dominated headlines across Europe, while volatile oil prices kept inflation risks in focus. Attention now turns to key interest-rate decisions from the Federal Reserve and Bank of England, alongside fresh eurozone growth and inflation data.

Market Recap.

Equity markets delivered a mixed but largely positive performance over the week, with UK equities leading gains while most US markets also moved higher.

The FTSE 100 ETF was the strongest performer, rising 2.01%.

In the United States, the Dow Jones Industrial Average ETF gained 0.87%, while the broader S&P 500 ETF rose 0.27%. Technology stocks remained under pressure, with the Nasdaq 100 ETF falling 0.92% for a second consecutive week.

Overall, markets showed signs of recovery following last week’s pullback, although continued weakness among technology stocks weighed on the Nasdaq.

News.

Extreme weather and the destruction it is causing have dominated the news this week, both in the UK and across Europe.

The UK is preparing for its fourth heatwave of the year, with temperatures in southern England forecast to reach up to 33°C on Wednesday. Amber heat-health alerts have been issued for London, the South East, East of England and East Midlands, with warnings of significant pressure on health and social care services.

The UK has received just 20% of its average July rainfall, leaving land exceptionally dry and increasing the risk of further wildfires. During the previous heatwave, firefighters tackled 19 significant blazes simultaneously across England and Wales.

Inflation.

The eurozone economy is expected to have remained relatively resilient during the second quarter, despite higher energy costs and continued geopolitical uncertainty.

However, preliminary figures due this week are expected to show inflation increasing again in July. Annual inflation stood at 2.80% in June, remaining above the European Central Bank’s 2.00% target as disruption to energy supplies pushed oil and gas prices higher.

Professional forecasters expect inflation to average 2.70% in 2026 before easing to 2.20% in 2027 and returning to 2.00% in 2028. The combination of resilient economic activity and persistent price pressures suggests inflation may take time to return sustainably to target.

Central Banks.

The European Central Bank has begun onboarding non-euro area central banks to its enhanced euro liquidity facility, known as EUREP, with access expected from the fourth quarter of 2026.

The facility will allow participating central banks to borrow euros against high-quality euro-denominated collateral, helping prevent liquidity shortages during periods of market stress. Individual central banks will be able to access up to €50 billion through short-term loans lasting between one day and one week.

EUREP will be operated by five national central banks under ECB coordination. The ECB said the facility would support the smooth transmission of monetary policy while strengthening the euro’s role in the global financial system.

Commodities.

Commodity markets remained volatile as oil prices climbed above $100 per barrel during the week before falling sharply after the United States and Iran paused strikes, raising hopes of renewed diplomacy. Despite retreating from their weekly highs, WTI crude rose around 2.00% to approximately $84.20 per barrel, while Brent gained around 2.90% to roughly $90.70.

Precious metals recovered as falling oil prices eased some inflation and interest-rate concerns. Gold rose around 1.8% to approximately $4,084 per ounce, while silver gained around 5.20% to roughly $58.90 per ounce.

ESG.

Weather has returned to the headlines this week, with the pattern of extreme heat highlighted in last week’s UK climate report now contributing to more serious disruption elsewhere in Europe.

Wildfires across France and Spain have forced around 375,000 people to leave their homes. In France, the Gironde fire has burned approximately 42,000 hectares, while Spain has recorded 32 major fires affecting more than 152,000 hectares so far this year.

Repeated heatwaves, prolonged dry weather and strong winds have left vegetation extremely dry, allowing fires to spread rapidly and become harder to control. While wildfires can have several causes, global warming is increasing the frequency and severity of the hot, dry conditions that intensify them, reinforcing the growing physical risks climate change poses to communities, infrastructure and businesses.

Geopolitics.

The UK reaffirmed its support for Ukraine as President Volodymyr Zelensky met new Prime Minister Andy Burnham, becoming his first international visitor.

During the visit, the UK announced it would share the intellectual property behind its Stone Cloak electronic warfare system, allowing Ukraine to manufacture the tablet-sized drone jammers at scale. Thousands of the devices, which are designed to prevent air-defence systems from detecting drones, have already been supplied.

The leaders also discussed air defence, maritime security and joint defence production, while meeting Ukrainian personnel who recently completed a UK-based maritime exercise focused on strengthening operations in the Black Sea.

Week Ahead.

United States

The Federal Reserve’s policy meeting will be the main focus in the US this week. The FOMC meets on 28–29 July, with its interest-rate decision and press conference due on Wednesday. Markets will assess how policymakers balance resilient economic activity against inflation risks linked to higher energy prices.

June Durable Goods Orders are released on today, followed by Consumer Confidence on Tuesday. Thursday 30th brings the first estimate of second-quarter GDP, June Personal Consumption Expenditures inflation and weekly Initial Jobless Claims. The Employment Cost Index and Consumer Sentiment conclude the week on Friday 31st.

United Kingdom The UK has a busy week of economic data. The latest labour market figures and June Public Sector Finances are released on Tuesday 21 July.

June CPI and Producer Price Inflation figures follow on Wednesday 22 July, with inflation likely to remain the main focus for markets and the Bank of England.

Preliminary July Manufacturing and Services PMI data are published on Thursday 23 July, followed by June Retail Sales on Friday 24 July.

Eurozone

Preliminary second-quarter GDP figures will be the main focus in the Eurozone this week, providing an early indication of how higher energy costs and geopolitical uncertainty have affected growth across the region.

Germany’s Ifo Business Climate Index is released today, while national GDP figures are published throughout the week. Eurozone GDP data follow on Thursday, before preliminary July inflation figures on Friday. Markets will assess whether price pressures continued to ease after annual inflation fell to 2.80% in June.

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.