August 2026 Market update

Overview

Markets continued their strong run in August, with global equities returning 3.3% for UK investors. Yet beneath the headline, the investment backdrop became more complicated.

Strong corporate earnings and continued enthusiasm for AI supported equites, while rising oil prices, persistent inflation and higher government bond yields revived questions over how long the expansion can continue with monetary policy remaining restrictive.

US equities led markets higher, while European markets also extended recent gains.

Volatility increased towards month-end as oil prices rose and bond yields moved higher, raising questions around the longevity of the economic expansion in a higher interest rate environment.

Full update below…