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

Commodities were by far the best-performing asset class in July.

They soared 12% during the month, as measured by the iShares S&P GSCI Commodity-Indexed Trust (GSG +0.36%).

It’s no wonder. There was a major sell-off in the king of commodities, crude oil, in June, with a sharp rebound in July.

Brent crude, the international benchmark, rose about 23% during the month, from $73 per barrel to $90 per barrel. Both the June sell-off and the July rebound were largely market reactions to the fluctuating prospects for a ceasefire in the Persian Gulf.

Gold also rose about 0.9% during July.

Meanwhile, the S&P 500 index was flat for the month, while the Nasdaq-100 fell 6.6% amid a broad-based sell-off in tech stocks.

Can the commodity streak continue in August?

Unfortunately, that’s almost impossible to predict. The price of oil has whipsawed since the U.S. and Israel initiated the conflict with Iran in February, climbing from about $72 per barrel before the conflict to $188 in late April, only to fall back to the pre-war price in late June before soaring again in July.

So, anyone willing to invest in oil right now is basically engaging in speculation.

Real estate might be a better bet right now

Meanwhile, a more durable trend is unfolding that might reward a modest investment. U.S. real estate investment trusts (REITs), as measured by the Vanguard Real Estate ETF (VNQ +0.00%), climbed 2.6% in July. REITs are having a great 2026 so far, up about 14% year to date, outperforming the S&P 500 by 4 percentage points.

Many REITs struggled in the aftermath of the COVID-19 pandemic due to trends such as work-from-home culture and depressed spending at brick-and-mortar retail outlets. Plus, elevated interest rates implemented by the Federal Reserve after the pandemic hurt REITs, many of which rely heavily on debt to expand.

But many of those trends have stabilized or reversed, with workers returning to offices and customers to shopping malls, and interest rates, at least as set by the Federal Reserve, unchanged this year.

And in fact, a few REIT categories are driving the entire REIT sector higher. Lodging and resort REITs were up almost 43% in the first half of the year, driven by a resurgence of group and corporate travel, according to the National Association of Real Estate Investment Trusts (NAREIT).

Data center REITs were up more than 33% through June, due to extraordinary growth in the sector (particularly from artificial intelligence companies and rising demand for data).

And healthcare and self-storage REITs have both climbed more than 20% in 2026, through June.

So, if I had to jump on a trend here, it wouldn’t be commodities. The direction the Iran war and the resulting prices of oil and other commodities will take is anyone’s guess right now. But REITs are back and may be worth an investment.