MarketWatch for September 2026
September proved challenging for investors as global equities declined in US dollar terms and government bond yields moved sharply higher. As bond yields and prices move in opposite directions, higher yields put pressure on bond prices and weighed on fixed income market performance. Persistent inflation concerns, resilient economic growth and expectations of further monetary tightening from major central banks weighed on both equity and fixed income markets. Energy was one of the strongest-performing sectors globally, supported by rising oil prices amid renewed tensions in the Middle East. Emerging markets also declined but proved more resilient than developed market peers, while commodities delivered positive returns as energy prices surged.
Global equities declined (in US dollar terms) in September. Meanwhile, Government bonds experienced sharply rising yields due to inflation fears, and commodities were strong amid higher oil prices.
United States
US stocks declined slightly. The financials, materials and consumer discretionary sectors were among the weakest while information technology held up well.
Europe
Eurozone equities declined. The information technology and energy sectors outperformed but other sectors were largely weaker. The European Central Bank raised its deposit rate by 25 basis points.
United Kingdom
UK shares also moved downwards. Again, energy was a top performing sector but there were declines elsewhere.
Japan
In Japan, the Topix index decreased slightly (in yen). Higher crude oil prices and expectations that major central banks would accelerate the pace of rate hikes weighed on the equity market.
Emerging markets
Emerging market (EM) equities declined in September, although they outperformed their developed market peers (as measured by the MSCI World Index). This came against the backdrop of a stronger dollar, rising yields, and an elevated oil price as the global economy continues to digest the ongoing implications of the Middle Eastern conflict. Taiwan, Brazil and Korea were amongst the best EM performers, while Turkey sold off sharply amid a liquidity crisis in its domestic fund industry.
Fixed Income
In bond markets, September proved to be another difficult month as rising energy prices, resilient economic growth, and a renewed tightening cycle from major central banks drove yields higher. As yields rose, bond prices fell, weighing on fixed income returns.
Commodities
In commodities, the S&P GSCI index registered strong gains amid renewed strength in the energy sector. A re-intensification of the Middle East conflict saw damage caused to Saudi Arabia’s East-West pipeline, which had been used by Saudi to export oil by bypassing the Strait.
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