Caspar Rock and Katarina Cohrs discuss market update and economic outlook July 2026 in global markets; AI investment supports resilient earnings

Webinar: Market update and economic outlook – July 2026

In our latest client webinar, Caspar Rock and Katarina Cohrs explore the key forces driving markets, from the AI investment boom and corporate earnings growth to the impact of geopolitical uncertainty and inflation risks.

This webinar was recorded on 22nd July. Views expressed in the video are based on developments as of that date.

Global markets delivered a remarkable recovery during the second quarter of 2026, despite a backdrop of geopolitical uncertainty and renewed tensions in the Middle East. In our latest webinar, Chief Investment Officer Caspar Rock and Investment Strategy Director Katarina Cohrs discussed why resilient economic growth, strong corporate earnings and continued investment in artificial intelligence (AI) remain supportive for investors, while outlining the risks they are watching closely.

Strong fundamentals continue to support markets

While the renewed conflict between the US and Iran has led to higher oil prices and increased market volatility, both speakers emphasised that the global economy has remained surprisingly resilient. According to Caspar, consumer spending in the US continues to be a key pillar of growth, supported by healthy household savings and recent tax refunds that have helped offset higher energy costs. At the same time, significant investment is flowing into areas such as AI infrastructure, energy networks, defence and supply chain reshoring.

“Growth continues to be well-supported, especially by, first, the consumer, and secondly, through the CapEx cycle,” Caspar said. “Inflation is the unknown.”

Caspar also reminded investors that periods of market weakness are a normal feature of investing. “Volatility is inherent in markets,” he noted, highlighting that even strong years for equity markets often include significant setbacks along the way.

Earnings remain the key driver

Katarina highlighted that the recent rally in equity markets has been supported by a corresponding improvement in corporate earnings, rather than by an expansion in valuations alone.

“It’s really been an astonishing quarter,” she notes, noting that global equities rose strongly during the period while earnings expectations also continued to move higher.

“Earnings are not only resilient, but earnings growth is actually very strong,” Katarina added. “Tech really is the standout sector, but other sectors are contributing quite strongly as well.”

While technology remains a significant contributor to market returns, Katarina stressed that earnings growth is becoming increasingly broad-based across sectors, helping to support the overall market backdrop.

Why AI remains central to the investment outlook

AI continued to feature prominently in the discussion. Both Caspar and Katarina note the uncertainty around how the technology will develop, but argued that current levels of investment are having a meaningful impact on economic growth and corporate profitability.

Katarina said the team is closely monitoring several aspects of the AI investment cycle, including whether demand continues to justify the substantial capital expenditure being undertaken by major technology companies and where the long-term economic benefits ultimately accrue.

Rather than viewing AI solely as a technology story, the team believes its influence extends across a range of sectors, including industrials, financials and utilities, creating opportunities well beyond the largest technology companies.

Remaining constructive, but alert to risks

Despite maintaining a constructive outlook, both speakers identified two key risks that could challenge markets in the months ahead: persistently elevated inflation and the possibility that expectations surrounding AI prove overly optimistic.

For that reason, portfolio construction remains focused on diversification and resilience. While opportunities continue to exist within equities, Caspar emphasised the importance of preparing portfolios for a range of outcomes rather than relying on a single market scenario.

“We have to watch, and we have to be prepared to adapt,” he said. “The backdrop still leads us to being reasonably comfortable with the economic outlook.”

The overall message was one of cautious optimism. Markets are likely to remain volatile as investors navigate geopolitical developments and inflation uncertainty, but strong earnings growth, resilient consumers and continued investment in AI are providing important support for the global economy and financial markets.

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