Market Review – June 2026

Please see our glossary for information on the financial terms used in this article.

Global equity markets experienced a volatile month, but were broadly resilient in June. European equities featured strongly and the UK’s FTSE 100 Index also gained, helped by its higher exposure to traditionally defensive sectors that pay regular dividends and lower exposure to the crowded AI trade.

In the US, the Nasdaq Index was notably weaker after a significant correction in some mega-cap technology names that are investing heavily in AI infrastructure (the so-called hyperscalers). Share price falls in the tech sector were driven by investors’ concerns over elevated valuations, expectations of interest rate hikes and heavy capital raising. Besides the bond issuance by the hyperscalers, there was the high-profile SpaceX IPO (when a private company sells shares to the public for the first time). The S&P 500 Index also posted a negative return in US dollar terms in June.

Sovereign bonds (a bond issued by a government to raise money for public spending) initially came under pressure in June, as oil price-driven inflation fears, resilient US economic data and signals from the US Federal Reserve (Fed) that interest rates may stay higher for longer to combat inflation pushed yields higher. Later, lower oil prices and easing inflation expectations supported a rally in government bonds, so for the month as a whole they recorded gains.

Notably, UK gilts (UK government bonds) ended in positive territory despite increased political uncertainty, following the resignation of Prime Minister Keir Starmer.

The US Fed and Bank of England held interest rates steady in the month, while the European Central Bank raised rates by a quarter-of-a-point to 2.25% and the Bank of Japan lifted rates, also by a quarter of a percentage point, to 1% (the first time they have been at that level since 1995).

The US dollar strengthened in June, as markets priced in a more hawkish tone from the Fed, while the Japanese yen fell to its lowest level against the US dollar since 1986.

Oil prices declined materially over the month, getting close to levels seen just before the start of the US-Iran conflict, as a ceasefire agreement between the two countries led to expectations of restored flows through the Strait of Hormuz. Precious metals including gold and silver were particularly weak as reduced geopolitical risk diminished their appeal as safe-haven assets.

The views expressed on this webpage should not be taken as a recommendation, advice or forecast, nor a recommendation to purchase or sell any specific security. We are unable to give financial advice. If you are unsure about the suitability of your investment, speak to your financial adviser.

The value of investments will fluctuate, which will cause prices to fall as well as rise and you may not get back the original amount you invested. Past performance is not a guide to future performance.