Latest financial update, May 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 May, stock markets around the world moved higher. This was led by shares in AI-related technology and emerging markets. The MSCI ACWI Index, which represents a range of companies from around the world, increased in value by 6% across the month.  
• Bond markets moved slightly higher, despite ongoing ups and downs during the month.   
• Oil prices fell, as hopes grew for easing tensions in the Middle East.

Shares

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

Global share markets performed well, led by Asia Pacific and emerging markets, while the US and Japan also made good progress. Investor confidence was supported by continued strength in some technology and artificial‑intelligence related companies, which helped lift markets around the world.  

In the UK, the FTSE 100 of the UK’s biggest companies, rose by just 0.7%. This was partly because the UK market has fewer large technology companies. UK inflation (rising prices) slowed in April, which helped ease some pressure on households, although economic signals were mixed across manufacturing and services.  

US shares rose strongly, led by large technology firms. Economic data showed inflation rising again, mainly due to higher energy costs, while job growth slowed. In Europe, shares also moved higher, despite ongoing concerns about inflation and slower business activity in some areas. Japanese markets rose too. The Japanese yen weakened and economic growth indicators softened slightly. 

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 modest gains overall, but prices moved up and down during the month. Inflation concerns and changing expectations around interest rates caused periods of volatility. Towards the end of May, easing oil prices and hopes of reduced geopolitical tension helped support bond prices.  

UK government bonds benefited from lower‑than‑expected inflation, while global corporate bonds were supported by generally solid company results. Bonds from emerging markets also edged higher.

Property

Property markets flat

The FTSE EPRA Nareit Developed Index, a measure of the performance of Real Estate Investment Trusts (REITs) globally, was broadly flat. These investments tend to be sensitive to expectations around interest rates, which remained uncertain 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. However, confidence has been affected by ongoing global uncertainty. 

Outlook

Although conflict in the Middle East and wider market uncertainty have continued, shares have delivered strong returns so far. In our view, markets may remain unsettled in the months ahead. 

We continue to believe that spreading investments across different regions is important, while keeping a close watch on risks such as trade tariffs, market concentration and geopolitical tensions.