This Asset Class Crushed the Stock Market Last Month. Can It Continue in August?

Crude oil's 23% rebound in July powered commodities to a 12% surge for the month, fueled by escalating tensions in the Persian Gulf. The rally put commodities sharply ahead of equities—the S&P 500 stayed flat through July while tech stocks declined.

The oil spike marks a dramatic reversal from earlier weakness, with geopolitical risk in the Gulf reigniting supply concerns. Commodities' 12% monthly gain represents one of the strongest performances relative to equities this year, as the asset class benefits from both physical supply constraints and safe-haven flows during Middle East flare-ups.

Meanwhile, REITs emerged as an alternative outperformer, climbing 14% year-to-date and beating broader market returns. Lodging and data center REITs led the sector's advance, driven by post-pandemic office returns and surging demand for AI infrastructure.