News & Views

Rising energy costs kept inflation and interest rates firmly in focus, as the ECB announced a rate increase and US wholesale inflation accelerated. This week’s review also explores the financial fallout from UK flight disruption, escalating US–Canada trade tensions and new sustainability guidance for advisers. Looking ahead, decisions from the Federal Reserve and Bank of England take centre stage alongside key economic data.

Markets remained broadly flat as oil prices climbed, Eurozone inflation rose and investors looked ahead to the ECB’s latest interest-rate decision.

US equity markets rebounded over the week, led by technology stocks, while UK shares finished slightly lower. Investors remained focused on renewed energy-driven inflation pressures, rising government bond yields and the prospect of further interest-rate increases. This week’s review also examines record ocean temperatures, Nepal’s flood-recovery challenge and the key economic releases ahead.

July saw market leadership broaden beyond technology, with UK equities, commodity-linked markets and selected emerging markets delivering strong returns. However, renewed energy-driven inflation pressures kept central banks cautious, while a sharp correction in semiconductor and AI-related stocks weighed on technology-focused markets. Against this mixed backdrop, the Balanced portfolio benchmark returned -0.45% during the month.

Markets remained broadly stable this week, despite further weakness across the major US indices and continued volatility in commodity prices. In this week’s review, we examine the latest US inflation figures, renewed uncertainty surrounding the Strait of Hormuz, the ECB’s warning over climate-related financial risks and the key economic data due in the week ahead.

UK equities proved resilient over the week, while US markets moved lower as technology stocks led the decline. Renewed fighting between the United States and Iran drove oil prices sharply higher and revived inflation concerns, while UK politics entered a new chapter with Andy Burnham preparing to take office. Looking ahead, markets will focus on UK inflation data and the ECB’s latest interest-rate decision.

Global markets delivered positive returns in June, as continued enthusiasm around artificial intelligence and semiconductor stocks outweighed concerns over rising inflation and restrictive monetary policy. Technology-led gains supported equity markets, while healthcare and biotechnology also performed strongly. However, bond performance dampened overall returns, with the Balanced portfolio benchmark gaining 0.43%. Central banks took differing approaches during the month.

Markets edged lower this week as renewed US-Iran hostilities pushed energy prices higher and revived inflation concerns. While the S&P 500 remained broadly stable, UK equities came under greater pressure. Elsewhere, America’s AI infrastructure boom began feeding through to technology and electricity costs, the ECB reassessed its interest-rate outlook, and attention turned to the economic impact of extreme heat and Europe’s simplified sustainability reporting rules.

This week, markets reflected a more cautious tone as investors balanced stronger blue-chip performance against renewed pressure on broader US equities and technology stocks. Political developments in the UK, easing inflation expectations in the Eurozone and falling commodity prices all shaped sentiment, while central banks continued to warn that stretched valuations, particularly around AI, could create risks if optimism begins to unwind.

Markets moved higher over the week as investor sentiment improved across both UK and US equities. Gains were supported by renewed appetite for risk assets, although investors continued to monitor inflation pressures, higher energy prices and ongoing geopolitical tensions in the Middle East. The week also highlighted the growing economic importance of climate-related disruption, with the UK heatwave adding pressure on infrastructure, public services and household costs.