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Our market summary
August was a positive month for most financial markets. Investors were encouraged by resilient economic growth, stronger-than-expected company earnings, and continued enthusiasm around artificial intelligence (AI). Global equities were up by 1.9%, supported by evidence that corporate profits remained healthy across a broad range of sectors. Technology stocks recovered strongly after weakness in July, while value and smaller companies also delivered gains. However, markets continued to face challenges, including elevated energy prices, geopolitical tensions in the Middle East, and uncertainty over the future path of interest rates, which weighed on bond markets and pushed government bond yields higher.
US
US
US equities were up by 2.0% in August, Strong second-quarter earnings results, particularly from technology companies, helped lift investor confidence. Nvidia's latest results reinforced optimism around ongoing AI investment, while software companies also delivered encouraging updates. Economic data remained resilient, supporting expectations for continued growth. Technology shares rebounded after July's sell-off and semiconductor stocks recovered, although concerns around interest rates and higher bond yields remained a headwind for some areas of the market.
The performance figures shown refer to past performance. Past performance is not a reliable indicator of future performance.
Europe
Europe
European equities were up 0.9% in August as investors responded positively to strong corporate earnings and a supportive global economic backdrop. Market gains were underpinned by improving earnings expectations, particularly within energy-related sectors. Higher commodity prices and demand for industrial materials supported parts of the market. However, rising gas prices and ongoing geopolitical tensions created uncertainty. Despite these concerns, European equities benefited from improved investor sentiment and the strength seen across global equity markets.
The performance figures shown refer to past performance. Past performance is not a reliable indicator of future performance.
UK
UK
UK equities were up 0.6% during the month, supported by gains in energy, mining, and value-oriented sectors. Rising commodity prices, including higher precious and industrial metal prices, provided a favourable backdrop for several large UK-listed companies. The UK stock market includes significant exposure to energy and resource businesses, so it benefited from strengthening commodity markets. While higher interest rate expectations remained a concern, investors were encouraged by resilient economic growth and improvements in company earnings, globally.
The performance figures shown refer to past performance. Past performance is not a reliable indicator of future performance.
Japan
Japan
Japanese equities were up 2.6% in August, supported by resilient economic conditions and improved investor confidence. Global demand for technology and manufacturing-related businesses remained supportive. Currency developments also remained in focus after coordinated efforts by the US and Japan to support the yen earlier in the summer. While the yen remained relatively weak by historical standards, market conditions stabilised during August. Strong global growth and rising earnings expectations helped underpin performance.
The performance figures shown refer to past performance. Past performance is not a reliable indicator of future performance.
Emerging markets
Emerging markets
Emerging market equities outperformed developed markets during August ending the month up by 2.6%, supported by stronger company earnings. Investor appetite for risk assets improved as global growth remained resilient and demand for commodities strengthened. Many emerging economies benefited from higher commodity prices and improving corporate profit expectations. Although geopolitical risks remained present, positive earnings growth and improving sentiment towards global economic prospects helped emerging market finish the month strongly.
The performance figures shown refer to past performance. Past performance is not a reliable indicator of future performance.
Fixed income
Fixed income
Fixed income markets faced a more challenging environment. Government bond yields rose as investors reassessed the outlook for interest rates and inflation. Concerns about persistent inflation, particularly given elevated energy prices, combined with a more hawkish tone from the US Federal Reserve (the Fed). As yields moved higher, bond prices generally came under pressure. Longer-dated government bonds were among the weakest areas, reflecting uncertainty around future monetary policy and inflation trends.
The performance figures shown refer to past performance. Past performance is not a reliable indicator of future performance.
Source: Quilter as at 31 August 2026. Total return, percentage growth over period 31 December 2025 to 31 August 2026. Equities are represented by the appropriate MSCI index, the Magnificent Seven is represented by the Roundhill Magnificent Seven ETF, UK gilts is represented by the ICE BofA UK Gilt Index, US Treasuries is represented by the ICE BofA US Treasury (GBP Hedged) Index, global government bonds is represented by the Bloomberg Global Aggregate Government - Treasuries (GBP Hedged) Index, and global corporate bonds is represented by the Bloomberg Global Aggregate - Corporate (GBP Hedged) Index.
The performance figures shown refer to past performance. Past performance is not a reliable indicator of future performance.
Marcus Brookes
Chief Executive Officer and Chief Investment OfficerMarcus is both the Chief Executive Officer and Chief Investment Officer of Quilter Investors. Marcus joined Quilter Investors in December 2021 from Schroders Personal Wealth, where he also held the role of Chief Investment Officer. Marcus has considerable investment management experience with a deep understanding of the multi-asset sector, having managed multi-manager fund ranges for more than 25 years at Schroders, Cazenove Capital, Gartmore, and Insight Investments.
Approver: Quilter September 2026
QIP 23842/29/18594
