You have them planted in hard clay, which pools water, dries quickly, and stresses your plants. The first thing a plant/tree will do is abort it's fruit if it is stressed.
PLEASE mulch them! If you have Nothing else, mow your grass and blanket them in grass clippings. Do the volcano mulching that they tell you Not to do to your trees. The worst that can happen is grass sprouting, which won't affect them. I, too am growing banana peppers. Mine are in great shape, just gotta pick them before they are "past it." I have them heavily mulched and applied Preen from the stems about 3 inches or more out to prevent any other seeds from sprouting.
We have had Southern weather heat for the past 2 weeks. My window AC's have been running constantly.
Regarding squash bugs, can't give you a good answer on that one.