Global equity markets ended June in a fragile stalemate, according to the latest monthly market report from Exante, as investors weighed a tentative peace with Iran against mounting fears of an AI bubble and fresh central bank tightening.
Exante notes the month was defined by uncertainty around the Strait of Hormuz, aggressive AI capital spending and inflation-driven rate anxiety. Performance diverged sharply: the S&P 500 fell 2.93% and the Nasdaq 100 dropped 3.67%, while the Dow Jones Industrial Average gained 1.24% and the Russell 2000 climbed 2.31%.
Bond markets told a calmer story. The 60-day extension of the Iran ceasefire pushed oil prices lower, fuelling hopes that some central banks may hold back from further hikes. The US yield curve bear flattened, with the 2s10s spread narrowing from 44bps at the end of May to 25.7bps. The dollar index rose 2.66% month to date, while gold retreated as a higher-for-longer rate backdrop dulled the appeal of the non-yielding metal.
In the US, Exante highlights an economy still in decent health. May payrolls rose by 172,000, unemployment sat at 4.3% and the flash composite PMI hit a five-month high of 52.2. Yet cracks are visible: some of the strength reflects firms front-running supply disruption linked to the Iran conflict, supplier delivery delays are the worst since August 2022, and employment fell for a second straight month. Consumer sentiment recovered to 48.9 from May’s record low, but headline inflation reached 4.2%, a three-year high.
The eurozone showed tentative resilience. Headline inflation climbed to 3.2% in May, prompting the ECB to lift rates by 25bps in June, while the flash composite PMI rose to a three-month high of 49.5. Consumer confidence improved by 1.2 percentage points, though Germany remains a weak spot, with its composite PMI at an 18-month low.
The UK looks increasingly strained. The flash composite PMI slid to a 14-month low of 49.4, with services activity at a 41-month low amid political uncertainty and Middle East fallout. Inflation held at 2.8%, but services prices accelerated to 3.7%. Unemployment reached 4.9%, payrolled employees fell 119,000 on the year and vacancies continued to shrink, underscoring a fragile labour market.
For Exante, the central question for the second half of 2026 is whether a durable peace deal can cool inflation fast enough to revive hopes of a Fed pivot, and whether the AI investment cycle can withstand rising scrutiny.
Read the full monthly report here.
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