Global markets delivered mixed returns in July as investors continued to assess the outlook for economic growth, inflation and central bank policy. US equities were weaker, with the Nasdaq falling 3.2% as AI-related stocks, particularly semiconductor companies, came under pressure amid elevated valuations and concerns over China’s technological advances. The S&P 500 declined by 0.1%, while the Euro STOXX 50 gained 0.6%. The FTSE 100 was the standout performer, rising by 3.6%, benefitting from its relatively low exposure to technology stocks and greater weighting towards financial and energy companies as investors rotated away from some of the year’s strongest performing stocks. Fixed income markets faced headwinds during the month as investors reassessed the outlook for interest rates. In the US, the 10-year Treasury yield rose by 27 basis points as persistent inflation pressures reduced expectations for near-term monetary policy easing. UK government bonds experienced a similar move, with the 10-year gilt yield increasing by 29.3 basis points, reflecting continued uncertainty around the path of inflation and interest rates. In commodities, energy prices rose sharply. Brent crude oil increased by 18.0%, supported by renewed supply concerns and developments in the Middle East. In currency markets, sterling strengthened against both the US dollar and the euro, appreciating by 1.7% and 0.9%, respectively.

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