Quarterly Market Commentary – September 2026

Our latest Quarterly Market Commentary reviews a summer shaped by geopolitical tension, persistent inflation and shifting expectations around interest rates. From June to August 2026, markets were forced to balance pockets of resilience against a backdrop of rising energy prices, fiscal concerns and increasingly cautious central banks.

Across global markets, investors entered the summer hoping inflation would continue to ease and give policymakers room to cut borrowing costs. Instead, renewed volatility in oil markets and geopolitical disruption complicated the outlook. As the commentary notes, “global markets were shaped by a challenging mix of geopolitical tensions, persistent inflation, shifting interest‑rate expectations and concerns about government finances.”

Equities proved relatively resilient. In the US, strong corporate earnings, enthusiasm for artificial intelligence and a robust economy supported share prices, even as higher bond yields periodically pressured valuations. The contrast between firm equity markets and weaker long‑duration bonds became a defining feature of the summer, reflecting investors’ willingness to take equity risk while demanding greater compensation for holding government debt.

The UK delivered a mixed picture. The FTSE 100 reached fresh record highs in July before losing momentum in August, while gilt yields rose sharply as inflation concerns and questions over government borrowing intensified. CPI inflation increased from 2.6% in June to 2.9% in July, keeping the Bank of England cautious and prompting investors to reassess the likelihood of near‑term rate cuts. Fiscal credibility also moved centre stage as markets scrutinised the new government’s spending plans.

The Eurozone experienced a similarly uneven period. Inflation eased in June but rose again in July and August, driven largely by higher energy costs. The European Central Bank responded with its first rate increase in almost three years, raising the deposit rate to 2.25%. Despite this, Eurozone equities remained surprisingly resilient, supported by strong earnings and improving manufacturing activity, even as bond yields climbed and political risk — particularly in France — added further complexity.

By late August, sentiment across global markets had become more cautious and selective. Investors weighed the appeal of higher bond yields against the prospect of further volatility as geopolitical tensions, fiscal pressures and inflation risks persisted.

As autumn approaches, the key question is whether inflation resumes its downward trend or remains stubbornly above target — a factor likely to shape both monetary policy and market behaviour in the months ahead.

Please feel free to read or download our latest Quarterly Market Commentary by clicking on the link below.

Kellands will continue to keep you updated on market developments on a regular basis. However, if you have any questions or need some financial advice in the meantime, please do not hesitate to get in touch.

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