July 2026 was defined by a geopolitical energy shock (US-Iran war), a hawkish Fed standoff, and a dramatic AI/semiconductor boom-bust-recovery cycle. European equities proved far more resilient than US markets, benefiting from broad earnings upgrades, energy sector tailwinds, and lower tech concentration.
The single most consequential macro development of July was again the ongoing and escalating US-Iran military conflict, which drove oil prices sharply higher. Brent crude approached $88/barrel by month-end, with WTI above $85, on track for its biggest monthly gain since March. On the final day of the month, Trump announced a deal for Hamas to disarm in Gaza. The second defining equity story of July was a violent unwind of the AI/semiconductor trade, followed by a partial recovery into month-end. Cracks in the AI narrative became visible early in the month when a Chinese AI breakthrough and signs of Chinese progress in advanced chipmaking fueled fears of rising competition and overcapacity. Both ECB and Fed kept rates stable in July, but the decision of the Fed was far from unanimous – three officials dissented in favor of a 25bp hike, the most hawkish split in years.
European markets significantly outperformed their US counterparts in July, with the FTSE 100 leading all major DM indices. The Nasdaq bore the brunt of the AI/semiconductor selloff. The Stoxx Europe 600 was on track for a fourth consecutive monthly gain and briefly set a new all-time high on July 31, before paring its gains.
The Austrian ATX posted a solid +1.6% gain, broadly in line with the broader European outperformance trend. In the US, Energy was the unquestioned US sector leader, sitting nearly three standard deviations above the peer group on a one-month basis, driven by the Iran war oil rally. IT was the clear laggard on the AI/chip unwind. The defensive rotation into Financials, Health Care, and Staples reflects the broader risk-off/inflation-hedge positioning. European sector breadth was notably stronger than in the US – all sectors except Technology posted positive returns.
From a style perspective, Value/defensives outperformed growth/tech across both the US and Europe for most of the month, before a partial reversal into month-end.
Overall, the ATX's +1.6% gain masked a highly dispersed market: a ~48-percentage-point spread between the best (OMV +15.1%) and worst (AT&S -32.9%) performers. The index was anchored by its energy (OMV) and financial heavyweights (VIG, RBI), while the construction (wienerberger, Porr, Strabag) and tech-adjacent segments (AT&S) acted as a meaningful drag.
The Q2 2026 reporting season was a key driver of intra-month dispersion on the ATX, with results concentrated in the final week of July (July 28-31). The scorecard was mixed: beats in Financials and select Industrials were offset by significant misses in Energy (on an EPS basis), Utilities, and Construction Materials. The net effect was broadly supportive for the index, though individual stock reactions were highly asymmetric. A key observation from the July earnings season sofar is the decoupling between EPS surprises and stock performance. OMV and Verbund both missed EPS consensus yet delivered strong MTD returns, as macro tailwinds (oil prices, power price re-rating) overwhelmed the earnings signal. Conversely, Erste and Palfinger beat consensus but ended the month lower, as the market focused on earnings quality and sector headwinds respectively. This pattern underscores that for the ATX in July, macro and thematic factors – the Iran war energy shock, EU trade protection, and the AI/chip unwind – were more powerful return drivers than individual earnings outcomes.
Author:
Andreas Wosol
Member of the board of ÖVFA
Amundi Austria GmbH, Head of Value
3 August 2026
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Note
Wiener Börse AG would explicitly like to point out that the data and calculations given in this report are historic values, which do not permit any conclusions as regards future developments or value stability. Price fluctuations and loss of capital are possible in securities trading. The contribution is the personal opinion of the analyst and does not constitute a financial analysis or a recommendation for investment by the exchange operating company, Wiener Börse AG.