U.S. shares fell overnight as escalating tensions in the Middle East pushed oil prices sharply higher, while disappointing earnings from two tech heavyweights added to the pressure. Alphabet's results reignited investor concerns about the scale of ongoing AI investment across the sector. 

The Dow Jones Industrial Average was down 0.97%. The S&P 500 fell 1.21% and the Nasdaq bore the brunt of the selling, down 2.15%. The Nasdaq's decline was driven largely by a 7% slide in Alphabet shares and a steeper 14% drop for Tesla, both following their latest quarterly results.

Adding to the risk-off tone, oil prices spiked after Yemen's Houthi militia, backed by Tehran and claimed responsibility for attacks on two Saudi Arabian oil tankers in the Red Sea, raising fears of a broader regional escalation. Crude prices climbed further after President Trump signalled the U.S. could strike Iranian infrastructure directly, adding another layer of geopolitical risk for markets to digest.

Commentary from Industry Leaders

Following on from last edition's look at which asset classes family offices are favouring, I want to turn to another theme from the UBS Global Family Office Report, regional asset allocation and where the smart money is choosing to be geographically positioned.

North America continues to dominate global family office portfolios, accounting for around 52% of allocations heading into 2026, a slight easing from 53% in 2025, but still a commanding share reflecting the depth and liquidity of US capital markets. Interestingly, this global figure masks a sharp divergence by region. US-based family offices are actually doubling down on home turf, lifting their North American allocation from 86% to 88% as geopolitical uncertainty pushes them toward familiar ground.

As one Hong Kong-based family office executive put it, when uncertainty rises, investors tend to retreat to what they know and the US market's fundamentals remain compelling enough to reinforce that instinct.

The story looks very different for family offices based in Europe and Asia Pacific, many of which currently hold outsized North American exposure and are now actively looking to rebalance. Growing interest is emerging for Asia Pacific (including Greater China) and Western Europe as destinations for fresh capital, suggesting these offices see their current US weighting as a concentration risk worth addressing rather than a structural preference.

Taken together, the picture is one of diversification working in different directions depending on starting point , Americans anchoring closer to home, while European and Asian family offices spread their bets further afield, reinforcing geographic diversification as a genuine risk-management tool rather than just a stated intention.

Podcast Series

Our partners at Clime Investment Management release a weekly podcast covering the latest market and economic insights.

This week John, Michael and Paul discuss why Australia is heading for its weakest decade of living standards growth in over 100 years and why our stock market has returned just 1% while global markets surge. 

Click the preview below to tune in.

Economic News 

Australia has been hit with a new US tariff regime, with the Trump administration confirming a permanent 12.5% levy on Australian exports, up from the temporary 10% rate in place since the Supreme Court struck down the original "liberation day" tariffs earlier this year. Rather than relying on that invalidated mechanism, Washington has pivoted to Section 301 of the Trade Act, alleging Australia and 59 other economies have failed to adequately police goods made with forced labour, a claim the Australian government strongly disputes.

For investors, the direct impact looks manageable. Roughly 70% of Australia's US-bound exports remain duty-free, including five of the top ten export categories, gold, beef, pharmaceuticals, copper and coins, while Cochlear has confirmed its products stay tariff-free. EY Oceania modelling puts the annual cost at around $1.6 billion, a modest figure in the context of the broader economy.

Market Snapshot 

• Australia: ASX falls but energy stocks surge.

• United States: Dow -1.4%, S&P 500 -1.2%, Nasdaq -2.2%. 

• Bonds: US 10-year yield at 4.69% and Australian 10-year yield at 4.99%.  

• Gold: Declined overnight.

Key Events Coming Up

• Wednesday 29th July: AU CPI (YoY and MoM)

Investment Opportunity

Private hospitality income opportunity: Pubs as an alternative income asset

A specialist hospitality manager with over a decade of experience owning and operating pubs across NSW and SA is raising capital for a new unlisted income vehicle targeting mature, cash-generative venues.

Why hospitality/pubs as an asset class

Australian food services and accommodation spending has grown steadily through multiple downturns, the GFC, the end of the mining boom, COVID and the recent rate-hiking cycle with revenue consistently resuming its upward trend afterwards. More notably, weekly pub food, beverage and gaming revenue all kept growing year-on-year even as the cash rate rose from 0.1% to 4.35% between FY23 and FY25, reflecting the habitual, community-based, lower-ticket nature of the spending.

Manager track record

The manager has owned and operated 18 venues over 12 years, reporting a value-weighted realised equity IRR since inception of around 11%, an average money multiple of 1.5x on realised investments and average EBITDA uplift of roughly 31% per asset through active management.

The opportunity

The new vehicle is targeting a mix of freehold, freehold-going-concern and leasehold pub assets, aiming for:

• Target yield: 6–8% p.a. post fees, largely tax-deferred

• Target total return: 10–12% p.a. post fees

• Quarterly distributions

• No fixed term, with a capped withdrawal facility (up to ~2.5% of NAV every six months) and a broader liquidity event roughly every five years

• Gearing target of 35–50%

• Minimum commitment $50,000, aimed at wholesale/sophisticated investors

Two seed assets are currently in the pipeline, one regional NSW freehold-going-concern venue under contract, and one leasehold venue in due diligence, with a broader initial raise targeting approximately $23m. 

Who it may suit

Income-focused investors wanting real-asset-backed, less-equity-market-correlated cash flow, portfolio diversifiers looking for exposure to everyday consumer spending and those wanting active operational management as a return driver rather than passive capital allocation.