Latest financial market update, June 2026

Being aware of what’s affecting financial markets can help you understand how your investments are performing.  

Markets move for many reasons. Changes in interest rates and inflation affect confidence among consumers and businesses. Political events, global tensions and company results can also push markets up or down.  

Investor sentiment plays a role too – when confidence is strong, markets often rise, and when uncertainty increases, markets can fall.

Highlights

• In June, stock markets around the world generally moved higher in Sterling terms, led by the European region, whilst the Asia Pacific market was a notable laggard over the month. The MSCI ACWI Index, which represents a range of companies from around the world, increased in value by 0.75% across the month. 
• Bond markets saw broadly positive performance.  
• Oil prices fell, as hopes grew for easing tensions in the Middle East following the signing of a memorandum of understanding on 18 June by the US and Iran, which included reopening the Strait of Hormuz and a 60-day window to continue negotiations.

Shares

Global stock markets had a positive month on strength in shares in the technology and AI-related sectors

Global share markets performed positively, led by Europe and Japan. Investor confidence was supported by continued strength in some technology and artificial‑intelligence related companies and an easing in geopolitical tensions.

In the UK, the FTSE 100 of the UK’s biggest companies, rose around 1%. UK inflation (rising prices) remained broadly steady, and the Bank of England held interest rates at 3.75% in June. 

US shares saw some positive growth, while inflation rose as energy costs increased. The Federal Reserve, however, held interest rates steady. Job growth slowed as hospitality and leisure sectors showed some weakness. In Europe, shares moved higher, while inflation slowed. At the same time the European Central Bank increased its key interest rate after almost 12 months of holding it steady. Japanese markets rose slightly too, with the Bank of Japan raising interest rates to 1% in June in response to rising energy prices. 

Bonds

Global bond markets saw some volatility

Bonds are loans to a government or company in exchange for regular interest payments and your money back later. When bond prices go up, yields, or the return you get from a bond, go down, and when bond prices fall, yields rise.

Bond markets saw some small gains, against a backdrop of prices moving up and down during the month. Inflation concerns and changing expectations around interest rates caused periods of volatility. Although easing oil prices and hopes of reduced geopolitical tension provided some support. 

UK government bonds saw small gains despite markets closely watching developments around the future direction of the Labour government following Keir Starmer’s resignation. Bonds from emerging markets performed strongly over June with Sterling and global credit markets also in positive territory over the month. 

Property

Property markets see some growth 

The FTSE EPRA Nareit Developed Index, a measure of the performance of Real Estate Investment Trusts (REITs) globally, grew by 2.4%. These investments tend to be sensitive to expectations around interest rates, which were broadly held steady during the month. Recent data suggests that parts of the UK retail property market have improved, with more people shopping and lower vacant premises, particularly in retail parks and central London locations.  

Outlook

With the signing of the memorandum of understanding by Iran and the US, shares continued to perform well over June, delivering strong returns over the first half of 2026. It is our view, however, that markets may remain unsettled in the months ahead – a view strengthened by further tensions in the Middle East following the quarter-end.

This reinforces our belief that spreading investments across different regions is important, while keeping a close watch on risks such as trade tariffs, market concentration and geopolitical tensions.