Market insight - global monthly outlook - July 2026

Global Outlook

US equities underperformed global peers in June as investors grappled with rising inflation, ongoing geopolitical uncertainty and expectations that interest rates may remain higher for longer. S&P 500 and NASDAQ index dropped by 1.0% and 2.7% respectively within the month.

European equities delivered another month of gains, reaching record highs as easing geopolitical tensions, industrials, financials, and consumer sectors supported markets.

Asian equities declined as oil-price volatility, geopolitical tensions and concerns about global growth weighed on sentiment. 

United States

• US equity markets were weaker in June, with performance slightly behind global peers as investors assessed continued AI-related demand, mixed economic data and ongoing geopolitical uncertainty.
• Headline CPI rose again from 3.8% to 4.2% in May, as expected. This marked the highest reading since April 2023 and continued the recent acceleration in inflation. The Fed maintained the interest rates at 3.50%-3.75%.

Europe (including UK)

• European equities delivered another solid month of performance in June, with the low-single digit rise helping indices end the quarter at record highs.
• European Central Bank raises interest rates to 2.25%, the first rise since September 2023, in a bid to contain inflationary pressures. 

Asia Pacific (ex Hong Kong ex China ex Japan)

• Asian equities declined during June as oil-price volatility, geopolitical tensions and concerns about global growth weighed on sentiment. 
• Taiwan was among the region's strongest-performing markets as continued demand for semiconductors and AI-related technology supported returns. South Korea's KOSPI was nearly flat, after suffered from a brutal mid-June sell-off, dropping over 8% in a single day as investors aggressively unwound crowded AI and semiconductor positions. 

Hong Kong and Mainland China (H-shares)

• Hang Seng China Enterprises index is down by 9.6% in June, as investors consolidated gains following the strong rally earlier in the year. Major constituents such as Tencent Holdings Ltd. and Alibaba Group Holding Ltd. weighed heavily on the gauge.
• In Hong Kong, the market broadly mirrored mainland China and Hang Seng Index declined 8.5% during the month. 

Japan

• Japan market advanced with exporters and technology-related companies leading gains.
• Expectations that inflation would remain relatively persistent, supported by ongoing policy normalisation from the Bank of Japan and higher energy prices, remained an important market theme.

Fixed Income

• Global sovereign bond markets delivered mixed performance during June as investors reassessed the policy outlook across major economies, and U.K. Gilts and German Bunds were the outperformers.
• UK gilts returned 0.65% over the month, followed by German bunds (+0.58%) and US Treasuries (+0.31%). 

Emerging Markets

• Emerging market equities declined in June as investors weighed developments in the Middle East and shifting expectations for US interest rates. 
• India remained resilient, supported by strong domestic growth and infrastructure investment. In ASEAN, returns were mixed. Singapore and Thailand advanced on resilient economic activity and export demand, while Indonesia lagged as currency weakness and capital outflows heightened concerns over external financing conditions.

From the perspective of Hong Kong pension investing. All data are sourced from Invesco dated July 17, 2026, unless otherwise stated.

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.