Markets spent the second week of July balancing renewed inflation concerns against resilient corporate earnings and continued strength in artificial intelligence-related stocks. Rising oil prices and higher bond yields revived questions over how quickly central banks can begin easing policy, encouraging investors to become more selective in their positioning.
Markets entered July with investor sentiment improving as signs of easing inflation and a cooling labour market reduced concerns that central banks would need to tighten policy further. The shift supported broader participation across global markets, with leadership extending beyond the technology sector for one of the first times in recent months.
Markets ended the final full week of June balancing two competing forces. Stronger-than-expected US economic data reinforced expectations that interest rates could remain higher for longer, while a sharp decline in oil prices eased inflation concerns and encouraged investors to rotate into more defensive areas of the market. Although economic growth remained resilient, falling bond yields and weaker energy prices helped improve sentiment later in the week. However, investors continued reducing exposure to high-valuation technology stocks in favour of sectors offering more stable earnings and lower sensitivity to economic uncertainty.
Markets spent the third week of June navigating a combination of cautious central-bank messaging, uneven global growth and ongoing geopolitical uncertainty. While expectations for eventual policy easing remain intact, policymakers continued emphasising patience, reinforcing the view that interest rates may remain restrictive for longer. Against this backdrop, investors favoured selective areas of the market, with technology and Japanese equities outperforming while Europe, China and more defensive sectors struggled to gain traction.
Markets spent the second week of June navigating a more challenging environment as rising energy prices, persistent inflation pressures and elevated bond yields complicated the outlook for monetary policy. While economic growth remained broadly resilient, investors became increasingly focused on whether inflation could remain higher for longer, particularly as geopolitical tensions in the Middle East continued supporting energy prices. As a result, bond markets, currencies and sector performance were largely driven by shifting interest-rate expectations rather than growth optimism alone.
