Written by Chris Ayton
Last week was a strongly positive one for global equity markets, with the MSCI All Country World Index (a broad measure of global stock markets) up +2.7%. Global technology stocks continued to drive some regional markets higher, and there was also renewed hope that the standoff in the Strait of Hormuz could be closer to coming to an end.
In the US, the Federal Reserve (the US central bank, which sets interest rates) held its first meeting under new Chairman, Kevin Warsh, and kept US interest rates on hold, but the accompanying commentary signalled growing support for rate hikes later this year. Warsh himself highlighted that US inflation has remained above its target for too long and reaffirmed that it remains focused on getting this under control. This news boosted the US dollar and resulted in further weakness in the price of gold and other commodities.
Japanese equities were some of the strongest performers last week, with the MSCI Japan Index up +6.1%, benefitting from the global rally in technology and AI-related stocks. The Bank of Japan (Japan’s central bank) also increased interest rates to around 1% last week, noting “the risk of a significant slowdown in the economy appears to have decreased”. Japan’s Deputy Governor also reassured investors by stating that “Japan’s economy remains resilient, supported by solid corporate earnings and rising household incomes”.
Emerging Markets continued their ascent, again led by tech-heavy countries such as Korea (MSCI Korea Index +14.7% for the week) and Taiwan (MSCI Taiwan Index +6.7%). China was a notable laggard, as it has been for much of the year, with the MSCI China Index falling -1.4% over the week. China’s retail sales, an indicator of Chinese consumer confidence, declined in May for the first time in three years, stoking fears of a renewed slowdown in the economy. Chinese equities are now down nearly -10% this year, which contrasts with the broader MSCI Emerging Markets Index (which tracks shares across developing economies), which is up over +30% over the same period.
Closer to home, UK equities, as measured by the FTSE All-Share Index (which tracks nearly all companies listed on the London Stock Exchange), fell -0.9% over the week. Despite some better-than-expected retail sales data and a small but unexpected drop in unemployment, investors became more cautious on UK assets. This was driven by news that the government had to borrow more than expected in May, renewed political uncertainty, and fears over what a likely change in Prime Minister could mean for future UK borrowing and taxation. While it is currently unclear what a new UK leader will mean for UK government policy, as ever, we believe the most appropriate strategy for dealing with short-term uncertainty is by embracing a truly diversified, longer-term focused investment solution.
All performance figures are stated in Sterling terms, unless otherwise specified.
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All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete. Unless otherwise specified all information is produced as of 22nd June 2026
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