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 Global markets just wrapped up a strong first half of 2026. But as we enter the second half of the year, investors face a critical question: what's next?

Geopolitics

The U.S.-Iran agreement has largely held, and that's good news. Shipping through the Strait of Hormuz is normalizing, oil prices are down, and bond yields have eased. But here's what matters most: market reactions to geopolitical shocks are usually temporary—unless they fundamentally hurt the economy.

Market Recap

The numbers tell the story. Global equities surged 15% in the first half, driven by AI spending and rising earnings. U.S. equities climbed 15%. Canadian equities rose 11%. And emerging markets? Up 28%, especially in Asia.

Looking Ahead

The second half looks more favorable. Lower energy costs could ease inflation and help consumers. AI spending will likely remain a key growth driver for the U.S. economy—though questions about returns on that investment linger.

Canadian Context

In Canada, we expect growth and labor conditions to improve. But there's a catch: trade policy uncertainty. The CUSMA review is now an annual process, not a straightforward extension. That uncertainty could dampen business investment and hiring.

Markets have shown resilience through plenty of headlines. But here's the reality: valuations reflect an upbeat outlook, which means less room to absorb disappointments. If earnings or growth fall short, there's less cushion.

Our view? A constructive path forward remains reasonable. But the key to navigating this increasingly complex environment is diversification and discipline.

Thanks for tuning in and see you in two weeks.