Global Markets Overview: June 2026

Why have equities remained resilient?

In recent months, investors have navigated a volatile geopolitical backdrop, with ongoing uncertainty surrounding the Middle East, marked by stop-start progress towards a potential U.S.‑Iran agreement, with periods of renewed tension and disruption to energy markets. Energy markets have been volatile, with oil prices rising during periods of uncertainty before easing as prospects for a resolution improve.

Despite this, equity markets have been performing well. In general, this reflects the forward‑looking nature of markets, which weigh near‑term risks against the longer-term, broader, and resilient economic and corporate outlook. More specifically, while the geopolitics have influenced near-term inflation expectations, markets continue to distinguish between the inevitable short‑term increases in inflation and more persistent pressures. So far, recent developments are being treated as temporary rather than structural.

Strong corporate earnings: The factor underpinning markets

A key driver of recent equity returns has been strong corporate earnings, especially in the U.S. This has supported solid equity market returns over May and the last three months. The MSCI World equity index has risen 4.8% and 7.7% respectively, although performance has varied materially across regions. U.S. equities have led the way, supported by strong and broad-based earnings growth and continued high investment across data centres, semiconductors and cloud infrastructure. Asian markets linked to semiconductors have also performed very well. Euro area equities have lagged due to their greater sensitivity to the energy price shock and a more moderate earnings outlook but have still risen over the last three months.

In summary, earnings strength and improving earnings expectations have underpinned equity market resilience – the equity markets with strong current and expected earnings growth are the ones that have largely looked through the geopolitical noise.

What does this mean for investors?

Investors continue to balance ongoing geopolitical risks against, in our view, a resilient backdrop for global economic growth and corporate earnings. To date, company fundamentals have remained the dominant driver of markets. This reinforces the importance of focusing on long‑term fundamentals, maintaining diversification and avoiding over‑reaction to short‑term headlines.