Geopolitical Signals: Half-time: What will define H2 2026?

As we head into the summer, the second half of 2026 looks set to be defined less by any single crisis than by continuing geopolitical shifts across multiple arenas.

The simmering conflict in the Gulf continues. US politics is entering an important phase as we approach the midterms. Across Europe, populist sentiment is increasingly setting the national agenda, as the EU continues to double down on Made in Europe. Running through all of this is a steady erosion of trust between traditional partners that is pushing countries to hedge, diversify and act in their own self-interest.

The five things we will be watching:

1. Path of the Iran conflict:As Tehran and Washington seek to preserve leverage, can escalation be contained and Hormuz kept open? And as Gulf and Asian powers hedge against a less predictable US, how will regional alignments evolve?
2. Peak Trump. With Greenland and Cuba back on the agenda, and mid-terms likely to change the power balance in Congress, do we see even more volatility ahead?
3. China's power play. With three US-China leader meetings in H2, including a September state visit to Washington, and looming decisions on rare earths, tariffs, tech controls and Taiwan, can stability be maintained without unacceptable concessions on either side?
4. European populists shape the agenda. As Europe contends with China’s aggressive export drive fiscal strains, a need to fund its security, and with France's presidential election in early 2027 fast approaching how does the populist narrative shape the European agenda?
5. Ukraine, Russia and the future security order. As NATO readiness is tested by US troop withdrawals, and the war moves closer to ordinary Russians - with Moscow targeting a summer offensive in the Donbas to set the line of control for any negotiation – does Putin see Trump as his best chance for a deal thereafter? Or if the summer offensive stalls, will Putin consider further escalation?

Mark Sedwill, Chair of Geopolitical Advisory, Rothschild & Co

Gulf War 3 isn't over. That, and the elections ahead from the US midterms to France in 2027, point to a sustained volatility, in which national agendas are likely to harden around self-interest

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Read on for more from Melissa Davies, Mick Mulvaney, Emile Hokayem and Nicola King here

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