The world’s investment markets survived the first half of 2026 better than expected.
| Index | Change
31/12/25–30/6/26 |
Change
31/3/26–30/6/26 |
| FTSE 100 | 5.7% | 3.2% |
| Standard & Poor’s 500 | 9.6% | 14.9% |
| Nikkei 225 | 39.2% | 37.2% |
| Euro Stoxx 50 (€) | 7.6% | 12.0% |
| Shanghai Composite | 3.2% | 5.2% |
| MSCI Emerging Markets (£) | 24.3% | 22.5% |
| MSCI AC World (£) | 11.9% | 13.7% |
Consider that you were told at the start of 2026 that by the end of June:
- The conflict involving Israel, the US and Iran that began at the end of February would still be unresolved.
- The UK would be on the verge of welcoming its seventh prime minister and ninth chancellor since the Brexit referendum.
With such insight, what would you have forecast for the performance of investment markets? If you are honest, you probably would not have predicted the state of affairs in which we found ourselves at the end of June. While neither another Middle East war nor yet another round of UK political musical chairs sound like good news, the markets proved resilient:
- The FTSE 100 ended the first half of 2026 up by 5.7%, having recovered from a big fall in March as the war started and the spectre of higher inflation loomed. Even the latest round of political upheaval in the UK has had little impact on investors.
- The US market, which accounts for around 65% of global stock markets in most world indices, had a strong second quarter, recovering from a drop in the first three months. The driver was the AI trade, helped by the flotation of SpaceX, Elon Musk’s rockets-to-social-media enterprise. For once, this was not a story of the Magnificent Seven, which together registered a small fall over the first half of the year.
- One of the stranger aspects of the AI trade was not to be found in the US, but in the surging performance of the MSCI Emerging Markets index, the most widely used benchmark for that section of the global market. Look inside the index and its two largest country components – accounting for about half of its total value – are Taiwan and South Korea. Both are homes of leading chipmakers – and quite possibly not what you immediately consider as emerging markets.
The performance of stock markets so far in 2026 provides support for the argument that trying to beat the market by timing investment is a fool’s errand – in this instance even foresight of war and politics would not have helped.
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The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances.
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