Monthly market summary – Review of September 2026

US equities delivered a return of 2.2% during the quarter, supported by resilient economic growth, healthy company earnings, and continued investment linked to AI. The US remained the main engine of developed market growth, with strong business investment and a firm labour market helping to support confidence. Energy stocks performed particularly well as oil prices rose, while software and technology also benefited from investor enthusiasm for AI. Investors largely looked through concerns around inflation and higher bond yields leading to record market highs.

The performance figures shown refer to past performance. Past performance is not a reliable indicator of future performance.

European equities saw losses of 2.7% over the quarter and lagged many global peers. Investors questioned whether companies in the region could match the earnings growth seen elsewhere, particularly in the US. Concerns over rising interest rates and the impact of higher bond yields on economic growth also weighed on sentiment. While improving economic activity and increased fiscal spending plans provided some support, particularly for defence and infrastructure-related businesses, Europe’s lower exposure to AI-driven growth themes limited investor enthusiasm.

The performance figures shown refer to past performance. Past performance is not a reliable indicator of future performance.  

UK equities delivered a return of 2.4% and held up better than many European markets. The UK benefited from its greater exposure to energy, commodities, and financial companies, sectors that were supported by higher energy prices and rising interest rates. Attractive valuations and comparatively strong dividend yields also helped maintain investor interest. While UK shares did not enjoy the same level of AI-related excitement seen in the US, their sector composition proved beneficial in an environment where inflation concerns, and higher bond yields, remained key.

The performance figures shown refer to past performance. Past performance is not a reliable indicator of future performance.

Japanese equities was the strongest-performing developed market during the quarter, up by 6.0%. Strong earnings growth, accelerating share buyback activity, and ongoing corporate governance reforms continued to support investor confidence. Although rising interest rates and higher bond yields created volatility across global markets, Japanese companies generally demonstrated strong profitability and shareholder-friendly behaviour. These factors helped overcome broader economic concerns and reinforced Japan’s position as one of the standout equity markets during the period.

The performance figures shown refer to past performance. Past performance is not a reliable indicator of future performance.

Emerging market equities were weaker than developed markets and declined by 0.3% during the quarter. Performance was affected by a global sell-off in semiconductor stocks during July, which weighed on several key emerging market markets and companies. However, earnings expectations across emerging markets continued to improve, particularly for businesses linked to technology and semiconductor production. While short-term market performance was disappointing, investors remained optimistic about future profit growth.

The performance figures shown refer to past performance. Past performance is not a reliable indicator of future performance.

Fixed income markets faced a difficult quarter as persistent inflation, higher energy prices, and further interest rate increases pushed bond yields higher. Investors reassessed expectations for future monetary policy, while increased government borrowing and significant corporate debt issuance created additional pressure. Longer-dated government bonds were particularly weak, as yields rose sharply. Investment grade corporate bonds also saw negative returns, while high yield bonds proved more resilient thanks to their higher starting yields and shorter duration.

The performance figures shown refer to past performance. Past performance is not a reliable indicator of future performance.