MarketWatch for June 2026
June brought a mixed picture for global markets, with technology stocks losing momentum, bond yields easing and commodities continuing to struggle. While European, UK and Japanese equities posted gains, US and emerging market shares faced headwinds from a stronger dollar, shifting investor sentiment and uncertainty around interest rates. Read on for a closer look at the key market movements and economic developments shaping investment performance around the world.
Global shares, as measured by the MSCI World index, fell in June (in local currency terms) amid a pullback in technology stocks. In government bond markets, yields generally fell over the month (meaning prices rose). Commodities had another weak month.
United States
US shares fell in June after strong gains in previous months. Investors moved out of some of the large technology stocks, and communication services stocks that have performed well. The top gaining sectors in June were industrials and healthcare.
Europe
Eurozone equities rose in June with gains led by the information technology and financials sectors.
United Kingdom
UK equities posted a modest gain in June. Declines for the energy and basic materials sectors limited the advance. Politics dominated news flow. Keir Starmer resigned as prime minister with Andy Burnham (former mayor of Greater Manchester) likely to replace him by mid-July.
Japan
Japanese stocks gained in yen terms in what was a volatile month. AI/semiconductor-related stocks and financials outperformed. However the yen weakened to its lowest level against the dollar in nearly forty years.
Emerging Markets
Emerging market (EM) equities declined in June, underperforming the MSCI World. South Africa, China and Indonesia led the negative performance. The AI-led rally that has been the dominant driver of EM returns in H1 2026 lost momentum in June. While the signing of a fragile US-Iran peace agreement helped ease some geopolitical concerns, a stronger US dollar alongside increasingly narrow AI leadership also acted as a headwind for EM equities and broader risk appetite.
Fixed Income
Global bond markets remained sensitive to energy price swings throughout June. An early rise in government bond yields was subsequently reversed, leaving yields broadly lower over the month. In the US, yields at the short-end of the interest rate curve rose while long-end yields fell as strong labour market data raised expectation for future interest rate hikes. The Federal Open Market Committee (FOMC) left the fed funds target rate unchanged at 3.50-3.75%.
Meanwhile, the European Central Bank raised rates by 25 basis points. Given ongoing uncertainty, President Lagarde reiterated that monetary policy is not on a pre-determined path. The Bank of Japan (BoJ) also raised its policy rate by 25 basis points to 1.00%. In the UK, the Bank of England held the base rate at 3.75% in a split vote, with two members voting for a 25 basis point rate hike.
Within investment grade credit markets, total returns were positive in both US dollar and euro denominated markets. However, while euro IG performed in line with government bond markets, a widening of credit spreads in the US resulted in negative excess returns. Primary issuance remains robust reflecting refinancing and AI-related capital expenditure.
It was a similar dynamic across high yield markets, with the euro denominated issuers outperforming the US on both an absolute return and on a spread basis.
Commodities
Commodities had another negative month in June. Energy was the weakest component as oil prices returned to levels last seen before the Middle East conflict. Gold fell amid expectations of higher inflation and a possible US interest rate rise.
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