How are inflation, interest rates and global events influencing markets? While global equity markets were largely unchanged in June, the outlook for inflation and monetary policy continued to drive market conversations.
July 8, 2026
Introduction
Global equity markets finished largely unchanged over the month of June. Despite the U.S. and Iran reaching an interim peace deal, bringing down oil prices, investors are concerned about the lasting impact of the conflict on inflation and the global economy. Artificial intelligence (AI) stocks saw some periods of volatility over the month as investors wondered about the return on investment in AI.
Inflationary pressures around the world accelerated. Major central banks are carefully monitoring the long-term impact on their respective outlooks for inflation before any interest rate changes. The Bank of Canada (BoC), U.S. Federal Reserve Board (Fed), Bank of England and Bank of Japan all held their policy interest rates steady in June. The European Central Bank, meanwhile, raised its policy interest rates by 25 basis points in an attempt to contain inflation.
In Canada, the S&P/TSX Composite Index inched higher, led by the financials sector. U.S. equities finished lower. The yield on a 10-year Government of Canada bond finished slightly lower. The yield on a 10-year U.S. Treasury bond edged higher. The price of gold declined over the month.
