Europe‘s 2026 Heatwave – Heat, Cooling, Drought and Disruption

Research evidence excerpt

Europe‘s 2026 Heatwave – Heat, Cooling, Drought and Disruption

Foundation

July 15, 2026 04:13 PM GMT

Morgan Stanley & Co. International plc+MSustainability | Europe Rachel Fletcher, Ph.D.

Equity Strategist

Europe's 2026 Heatwave – Rachel.Fletcher@morganstanley.comArushi Agarwal, CFA +44 20 7677-4089

Arushi.Agarwal1@morganstanley.com +44 20 7677-3944

Heat, Cooling, Drought and Morgan Stanley Europe S.E.+

Claire A Thuerwaechter

EconomistDisruption Claire.Thuerwaechter@morganstanley.com +49 69-21662842

This year's heatwave has broken records. We answer key Morgan Stanley & Co. International plc+

Daniel Khajenouri

Equity Analystquestions on the intensity of the heatwave, the disruption

Daniel.Khajenouri@morganstanley.com +44 20 7425-3065

caused, the impact of low Rhine water levels, AC penetration in

Lisa H De Neve

European households, and what companies have said about the Equity Analyst

Lisa.De.Neve@morganstanley.com +44 20 7677-0250

2026 heatwave so far.

Morgan Stanley & Co. LLC

Stephen C Byrd

Equity AnalystM Stephen.Byrd@morganstanley.com +1 212 761-3865

Key Takeaways

Morgan Stanley Asia Limited+

It was the warmest June on record in western Europe, with temperatures ~3°C

Ehsernta Fu

above historical levels. Exceptional heat has extended from late May into July. Equity Strategist

Ehsernta.Fu@morganstanley.com +852 3963-3711

Rhine levels, a key transport route for chems, refined products and commodities,

are below the 10y range, though companies have recently diversified logistics.

Broader disruption has been seen across transport, power, water and labour.

Management commentary on the heatwave so far has been mixed.

Only 19% of European households have AC. Penetration is lowest in northern

Europe, though demand is growing as hot days and nights become more

common.