Month in the Markets: August 2026

The Month in a Minute

Global markets rose in August, helped by strong company earnings and a recovery in technology shares. The US, Asia, and Emerging Markets led these gains, while the UK and Europe lagged. However, markets remained unsettled by changing interest rate expectations, higher borrowing costs, and renewed tensions between the US and Iran.

Technology rebounds but rate concerns remain

Technology stocks recovered in August, led by software shares and a recovery for AI chipmakers. Their strong results helped ease fears AI could disrupt parts of the software industry, while Nvidia’s latest numbers showed demand for chips remains strong.

While AI remains a key driver for markets, it seems investors are becoming more selective, rewarding companies that can show clear earnings growth – not just big AI ambitions.

Interest rates were also in focus; early in the month, signs of a slowing jobs market and cooling inflation boosted hopes that rates could start to lower.

Later in August, however, comments from the US central bank suggested rates could stay higher for longer, making investors less confident about near-term rate cuts.

Meanwhile, higher oil prices – driven by tensions in the Middle East and disruption around key shipping routes – added to inflation concerns. This resulted in falling bond prices as energy-led inflation fears reignited.

Despite these pressures, global stock markets have been notably resilient still finishing the month with good returns.

September will see a key interest rate decision by the Federal Reserve where an interest rate hike is currently expected. However, with fresh jobs and inflation data to be released in the weeks prior sentiment can change quickly.

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