First half of 2026 in review for a euro investor

The first half of 2026 ended with most share indices higher than they began, and that single fact hides almost everything that happened. A war closed the Strait of Hormuz, Brent crude went from about USD 72 to more than USD 126 and back, the ECB raised rates for the first time since 2023, and the dollar gained about 3 per cent against the euro. For a euro investor the S&P 500's 9.6 per cent became roughly 13 per cent, while the DAX managed about 2.

What follows is the half-year in figures we could check, and then the part that matters more: what to look at in your own portfolio now that 30 June is a reporting date.

What happened between January and June?

The year began quietly. On 28 January the euro stood at USD 1.1974 at the ECB's reference rate, its high for the half-year, and a day later gold set a record: USD 5,405 an ounce at the London afternoon fixing.

On 28 February the United States and Israel attacked Iran, and Iran closed the Strait of Hormuz to most shipping. Brent crude had traded at about USD 72 a barrel the day before. It rose by roughly half in March alone and touched a little over USD 126 on 30 April, the highest price in four years. Share prices fell through March; the DAX dropped to its lowest level since April 2025.

The second quarter reversed most of it. A ceasefire has been in place since April, tanker traffic through the strait has partly resumed, and at the start of July Brent is back below USD 71, where it stood before the war. The S&P 500 gained 14.9 per cent in the three months to the end of June, its largest quarterly rise since the second quarter of 2020. The STOXX Europe 600 rose 10 per cent in the quarter and reached a record on 30 June.

Where did the indices end?

The S&P 500 closed the half-year 9.6 per cent higher. Set against its second-quarter gain, that means the index was down between four and five per cent at the end of March. An investor who looked only on 31 December and 30 June saw a pleasant, ordinary half-year. One who looked at the end of March saw a loss and an oil price that had almost doubled.

The DAX closed on 30 June at 24,995.81 points, about 2 per cent above its level at the end of 2025. After the strong German year of 2025 that is a pause, and it is a reminder that the home index and the broad European market are different things: the STOXX 600 did far better in the same months.

What did the dollar do to a euro investor's return?

This is the reverse of the first half of 2025, which we described a year ago. Then the dollar fell and took most of the US market's gain away from euro investors. This time it helped.

The ECB reference rate was USD 1.1750 per euro on 31 December 2025 and USD 1.1394 on 30 June 2026. A dollar therefore cost about 85.1 cents at the start and 87.8 cents at the end, a rise of 3.1 per cent. Multiply the two effects and the S&P 500's 9.6 per cent in dollars is about 13 per cent in euros, before dividends.

The same arithmetic applies to anything else you hold in dollars. A US venture fund whose net asset value did not move at all between January and June is worth 3.1 per cent more in euros on 30 June than on 31 December. That is not performance, and it will show up in a euro report as if it were. We went through the mechanics in the article on USD funds for a euro investor.

Why did the ECB raise rates while the Fed held?

On 11 June the ECB's Governing Council raised its three key rates by 25 basis points. The deposit facility rate has been 2.25 per cent since 17 June. It had been 2.00 per cent for exactly a year, since the cut of June 2025, and the last increase before this one dated from September 2023. The ECB's stated reason is the war: in its decision it writes that the conflict is generating inflation pressures, and its staff now project inflation of 3.0 per cent for 2026, 2.3 per cent for 2027 and 2.0 per cent for 2028, with growth of 0.8 per cent this year.

The Federal Reserve did not move in the first half. On 17 June it left the target range for the federal funds rate at 3.50 to 3.75 per cent, by unanimous vote, and noted that inflation remains above its 2 per cent goal partly because of supply shocks in energy.

For the owner of a rented flat whose fixed-rate period ends in the next two years, the ECB's step matters less than it sounds. Ten-year mortgage rates follow capital market yields, not the deposit rate, as we explained when the ECB was still cutting. What has changed is the direction of the debate. Twelve months ago the question was how much lower rates would go. That question is closed for now.

Gold fell, which surprised people who hold it as insurance

Gold reached its record four weeks before the war began and then declined through the war. By 26 June it stood at about USD 4,072, roughly 7 per cent lower than at the start of the year according to the World Gold Council, and in the last week of June it traded below USD 4,000. A stronger dollar and rising rate expectations weighed more than the conflict supported it.

We wrote in September 2025 that gold's role next to illiquid holdings is a reserve you can sell when nothing else can be sold. A half-year in which it falls during a war does not refute that. It does show that the insurance has a price that moves, and that a position bought at the January record is under water.

Did the exit market reopen?

In the United States, yes, on paper. SpaceX listed on Nasdaq on 12 June at USD 135 a share and raised USD 86.2 billion including the over-allotment option, the largest initial public offering there has been. Equity issuance in the US reached a first-half record of about USD 251 billion by 26 June, according to data reported by Bloomberg.

For a private LP this needs one sober sentence. A listing is not a distribution. When a portfolio company goes public, the fund usually holds shares under a lock-up, marks them at the share price, and pays out months later, in cash or in shares. Your DPI does not move on the day of the listing. The drought we described last year ends in your account when the money arrives, and for most funds one very large IPO changes nothing.

What to check in your own portfolio now

A half-year review of the market is only useful as a prompt to review your own figures at the same date. Four checks are worth an hour this week.

1. Note the value of the liquid part as of 30 June, in euros, and separate the currency effect from the price effect for the dollar positions.
2. For every fund, write down which reporting date its latest NAV carries. Most will still say 31 March, close to the low of the half-year. The 30 June reports arrive from mid-August.
3. Recompute the private share of the whole portfolio. Liquid assets rose in the second quarter; private marks did not yet follow. The share is probably lower than you think, the opposite of the denominator effect of April 2025.
4. If a loan's fixed-rate period ends before the end of 2028, ask your bank for current terms. The answer will be less comfortable than it was a year ago, and it is better to know.

The half-year itself teaches the same thing as the tariff weeks of 2025, which we revisited in April. The low came and went within a quarter. Nobody who held on needed to do anything, and those who must sell at the low are the ones without liquidity for a capital call. That is the figure to know before the next shock, not after it.