Global equities moved higher in August, led by gains in the US, Europe and technology-oriented Asian markets as strong earnings and renewed enthusiasm for AI supported sentiment. Taiwan and South Korea outperformed, while China and the UK lagged. In fixed income, corporate bonds proved more resilient than government bonds, with rising bond yields weighing on sovereign debt markets globally.
Europe
European equities reached record highs in August as resilient economic data, strong earnings and a revival in AI-related stocks supported further gains. Technology led the market higher following its summer lull, while materials and communication services also outperformed. Meanwhile, eurozone inflation accelerated to 3.3%, reinforcing expectations that the European Central Bank would continue its tightening cycle as policymakers sought to contain energy-driven price pressures.
UK
UK equities declined in August, ending a four-month winning streak. Higher oil prices and rising bond yields weighed on sentiment, while sterling strength limited gains from energy and mining companies. ONS data showed inflation rose to 2.9% in July, driven by higher energy costs and the steepest increase in gas prices since 2022. US US equities advanced, led by the technology-heavy Nasdaq Composite as strong Nvidia earnings reignited enthusiasm for AI-related investment. The S&P 500 recorded its strongest August since 2021, although gains were tempered by Middle East tensions, hawkish Federal Reserve commentary and mixed economic data. Labour market data disappointed, with the US economy unexpectedly losing 23,000 jobs in July versus expectations for employment growth.
Asia
Asian equities delivered positive returns in August, supported by solid corporate earnings and continued investment in AI and digital infrastructure. Taiwan was the region’s strongest-performing market, while South Korea advanced as semiconductor shares rebounded and major technology companies enhanced shareholder return programmes. China declined as weak domestic demand and limited policy support continued to weigh on sentiment.
Emerging markets
Emerging market equities advanced in August, supported by strong gains across Emerging Europe, the Middle East and parts of Asia. Easing inflation expectations, firmer commodity prices and continued AI-related investment provided support, while technology-focused economies benefited from sustained semiconductor demand.
Fixed income
Bond markets delivered mixed returns, with corporate bonds generally outperforming government bonds. Inflation concerns, fiscal pressures, increased issuance and shifting central bank expectations pushed long-dated government bond yields to multi-year highs across the US, UK, eurozone and Japan. By contrast, corporate bonds proved more resilient, supported by strong corporate fundamentals, robust income demand and tight credit spreads.
Read the full report here
Investment risks
The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.
Important information
Views and opinions are based on current market conditions and are subject to change. This is marketing material and not financial advice. It is not intended as a recommendation to buy or sell any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication.
EMEA 5888193/2026
