Written by Cormac Nevin
August is supposed to be the quiet month, and much of the UK is now officially in drought after the driest July since records began. There has been no equivalent shortage of market news. Two of the threats that have shadowed markets all year receded at once, and almost everything rose.
The first was the oil price. Negotiations to reopen the Strait of Hormuz (the narrow shipping lane through which a large share of the world’s oil is transported) progressed early in the week before stalling on Thursday, when Iran published terms considerably more restrictive than markets had expected. Crude nonetheless ended the week meaningfully cheaper.
It is worth pausing on how contained the oil price has been throughout this crisis. The Strait has been effectively closed since late February, interrupting around 20 million barrels a day, or roughly a fifth of global supply. Forecasts of $200 a barrel were commonplace at the time. Yet Brent crude peaked near $126 in April and (once adjusted for inflation) never came close to its 2008 record, remaining more than 40% below it. Producers elsewhere raised output, and consumers (particularly in China) simply used less oil. The world runs on oil rather less than it used to, which is why the largest supply disruption in modern energy history has produced an expensive year rather than a catastrophic one.
The week’s second surprise arrived on Friday. The US economy lost 23,000 jobs in July, against expectations of roughly 80,000 added, and June’s figure was revised down to just 20,000. That sounds like bad news, yet share prices rose. The explanation is that the Federal Reserve, under Chair Kevin Warsh, has spent 2026 debating whether to raise interest rates rather than cut them, with three of its members voting for an increase in late July. A cooling jobs market makes a rise in September far harder to justify.
Together, these took the interest rate threat off the table for now. The MSCI All Country World Index (a measure of shares across developed and emerging markets) returned +2.6%, the S&P 500 +3.3% and the technology-focused Nasdaq-100 +4.9%. Bonds gained too, with the Bloomberg Global Aggregate Index up +0.5% in Sterling-hedged terms.
At home, the same oil story produced two opposite outcomes. The FTSE 100 is heavy with large energy and mining companies, so cheaper crude held it to just +0.5%. The medium-sized FTSE 250, whose businesses tend to buy energy rather than sell it, rose +3.7%, with smaller UK companies up +3.6%.
There is a postscript to the weather. The sunshine parching British fields is also generating electricity at record rates. Solar panels supplied a quarter of all European Union power in June, more than gas, nuclear or wind, against a tenth five years ago. The scale elsewhere is greater still: China installed 315 gigawatts of solar capacity last year alone, roughly five times the European Union’s additions. None of this makes energy shocks disappear. But it is a large part of why this one has proved survivable, and a reminder that the same conditions can present an opportunity as well as a risk.
Which is why the week’s laggards deserve a word. Listed infrastructure returned -1.3% and broad commodities -0.2%, having gained close to 23% over the year so far. These are not disappointments. They are the cost of insurance in a week when the house did not burn down – and precisely why we hold diversified portfolios, so that whichever way the currents flow, some part of the portfolio is positioned to benefit. For long-term investors, that remains the surest course.
All performance figures are stated in Sterling terms, unless otherwise specified.
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All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete. Unless otherwise specified all information is produced as of 10th August 2026.
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