In July 2026, artificial intelligence optimism drove a robust inflow of $49.23 billion into global equity funds in the week ending July 8, the largest weekly inflow in three weeks, helping U.S. stocks close higher on July 10, 2026, with the Dow, S&P 500, and Nasdaq Composite all posting gains despite geopolitical headwinds. However, the International Monetary Fund, in its July 2026 World Economic Outlook, highlighted the risk scenario of “AI disappoints, risk-off ensues,” and skeptics like Cory Cramer of Seeking Alpha argued that the projected 27% earnings growth for 2026 is 'largely misleading.' Geopolitical tensions in the Middle East, including renewed conflict between the US and Iran and instability in the Strait of Hormuz, rattled oil markets and weighed on sentiment, causing European shares to snap a four-week winning streak on July 10 due to a tech selloff. Marta Norton, chief investment strategist at Empower, warned on July 10 of “a certain complacency that the war is no longer an issue.” Crude oil prices initially spiked but then eased on July 10, helping to temper inflation worries and support risk appetite.