Qualis Market Update – 27 July 2026

The News

The past two weeks have seen some good news for UK investors. Uncertainty on the political front has – for now – diminished with Andy Burnham confirmed as the UK’s latest prime minister who has since been laying out his political agenda and putting his cabinet in place. Regardless of investors’ political leanings, having greater certainty is no bad thing and this will help onlookers get a better idea of what to expect for their portfolios under Burnham. There was also some unexpected, good news as UK inflation rose by only 2.6% in the 12 months to June, its lowest level in over a year. This was below what many experts had anticipated but it remains to be seen how this behaves in the coming months, especially with higher energy bills set to complicate the short-term outlook.

The picture was less positive on the other side of the Atlantic where equity markets have been whipsawed by concerns around AI frothiness. This stems from valuation fears around much-hyped AI stocks, with the US equity market heavily influenced by the massive tech names it’s home to. The US market was also impacted by sharp movements in the oil price, with this surpassing $100 a barrel at one point as fighting intensified in the Middle East. However, at the time of writing, this has since retreated slightly as talks have resumed between Iran and the US.

And, as if that wasn’t enough, last week saw President Donald Trump launch tariffs on imports from over 60 countries (including the UK). In February the US Supreme Court ruled the use of such tariffs as illegal, but the latest development shows the White House is not backing down any time soon and the topic of trade wars could continue to rumble on.

Market Movements

Due to the dominance of the US tech sector, global equity markets have fallen over the past two weeks as investors became increasingly concerned about the high valuations of AI stocks. The S&P 500 has fallen from around 7,500 on the 13 July to around 7,400 two weeks later, while the Nasdaq has also edged downwards – from 25,800 to just over 24,900 over the same period. Conversely, in the UK the FTSE 100 has trended up in the past two weeks from 10,490 to just over 10,800. Investors may still be wary about being overly exposed to overhyped AI valuations, but there are signs that there is still momentum left in the AI narrative.  China’s biggest chip maker – ChangXin Memory Technologies or CXMT – recently listed on the Shanghai Stock Exchange and shares have since soared 470% in price. It remains to be seen what happens next with this stock, but the sharp performance will be taken as good news by some tech investors.

Government bonds have benefited from falling energy prices which reduce the risk of another inflationary shock. The US 10-year Treasury yield declined around four basis points to 4.64%, while the UK 10-year gilt moved back below 5% and the more policy-sensitive two-year gilt fell around six basis points. This is an unusual but welcome session in which equities and bonds have risen together: equities are responding to lower geopolitical risk, while bonds are responding to lower inflation risk. Nevertheless, yields remain historically elevated, and the upcoming Federal Reserve and Bank of England meetings mean the improvement should be viewed as relief rather than a decisive change in the interest-rate outlook.

And, as mentioned, the price of oil has also been moving rapidly. The price of a barrel of brent crude was $84 on 13^th July, but this soon shot up to $100 just 10 days later. A pause in fighting between Iran and the US has since seen this retreat to $89.

Looking Ahead

This week, several major central banks – the Bank of England, the European Central Bank and the US Federal Reserve – are due to make rate decisions. These will be an interesting watch for investors, given the different ways these central banks’ economies are performing. Many expect the Bank of England to hold rates given the recent fall in inflation, while the picture is less clear in the US given the impacts oil prices are having on consumers. Additionally, with Microsoft, Meta, Apple and Amazon all reporting this week, earnings will determine whether recent equity rebounds have any genuine foundations.

Everyone will continue to watch and analyse what tech stocks do. Which is why, from an equity investment perspective, it’s worth giving some context to CXMT’s meteoric rise. There is a genuine fundamental story here as CXMT is China’s largest DRAM producer and has benefited significantly from global memory shortages. But this is not really a pure AI company; it’s a cyclical memory manufacturer benefiting from AI-related demand. With under 7% of its shares freely tradable, scarcity appears to have amplified the move. A strategically important business can still become a speculative asset, and its fivefold first-day gain looks more like AI narrative, constrained supply and investor exuberance than efficient price discovery.

Disclaimer

This article does not constitute investment advice or an offer to sell or a solicitation of an offer to buy the products described within. You should consult your financial adviser before making any decisions

Please note that any performance figures are provided for information purposes only and are not to a guide to future returns. The performance of your own investments may deviate due to a number of factors, including product charges, the timing of contributions & withdrawals and portfolio rebalancing.