Weekly Market Review

Global equities remain supported by resilient earnings and broadening market participation, while investors balance this against higher bond yields, energy prices and changing interest-rate expectations.

Market Snapshot

Why We Quote the ARC Benchmark

To help put your portfolio’s performance into proper context, we compare it with the ARC Private Client Index. Unlike a stock-market index such as the MSCI World, ARC measures the actual, net-of-fee returns achieved by professional wealth managers across diversified portfolios containing investments such as equities, bonds, cash, structured products and alternatives. Portfolios are grouped according to their level of investment risk, allowing us to compare your results with portfolios managed to a broadly similar risk profile. We therefore believe ARC provides a fairer and more meaningful measure of how your overall portfolio has performed relative to both the level of risk taken and the wider wealth-management industry.

Are ARC Benchmarks independent?

ARC figures are independent of PWM Wealth and any individual investment manager. The benchmark is compiled by S&P Dow Jones Indices using actual performance data submitted by a broad group of participating wealth managers. The important distinction is that the underlying returns come from the participating managers, but they are independently checked, grouped by risk level and aggregated to produce the ARC benchmark. No single manager determines the result. The dataset currently represents approximately 500,000 portfolios across more than 140 wealth managers.

ARC USD Equity Risk PCI - Dec 03
+6.2% YTD
ARC USD Balanced Asset PCI
+4.3% YTD
ARC USD Cautious PCI - Dec 03
+2.0% YTD
ARC USD benchmark figures shown are the latest publicly available S&P Dow Jones Indices Q3 2026 performance estimates through July 2026. Movements shown are year to date.

Summary

  • Global equity markets finished August with solid year-to-date gains, supported by resilient corporate earnings and continued enthusiasm around artificial intelligence, although rising oil prices and higher government bond yields created renewed volatility at month-end.
  • US equities recorded another positive month, with technology remaining an important source of support, while investors increasingly focused on the possibility that persistent inflation could lead the Federal Reserve to raise interest rates in September.
  • European markets have also delivered positive returns in 2026, with economic activity proving more resilient than expected, although higher energy costs and the prospect of tighter European Central Bank policy remain important near-term considerations.
  • Global bond markets remain under pressure as investors demand greater compensation for inflation, elevated government borrowing and higher-for-longer interest rates.
  • The global opportunity set remains broad, with positive year-to-date equity returns across the US, Europe, Japan and a number of emerging markets.
  • This week’s attention turns to US labour-market data and European inflation, which should provide further guidance on the direction of monetary policy into September.

Market Review

United States

US markets ended August on a positive footing overall despite a softer final session. The S&P 500 Total Return Index gained 2.7% during August and was up 13.1% year-to-date at month-end, while strong technology earnings continued to reinforce confidence in the longer-term artificial intelligence investment cycle. The economic picture remains relatively resilient, but inflation is still above the Federal Reserve’s target and Chair Kevin Warsh’s hawkish Jackson Hole message has increased expectations that interest rates could rise again in September. Higher oil prices have added to those inflation concerns, making the upcoming employment data particularly important: a still-resilient labour market would give the Fed greater room to remain focused on price stability, while softer employment could encourage a more patient approach.

Europe

European equities have continued to make progress in 2026, with the S&P Europe 350 Total Return Index up 12.9% year-to-date through the end of August. Economic activity has generally proved more resilient than feared, helping corporate earnings and investor confidence, but the region remains sensitive to energy prices because of its dependence on imported energy. With inflation running close to 3% and the Iran conflict keeping energy risks elevated, markets are increasingly expecting the European Central Bank to tighten policy again in September. Even so, long-term inflation expectations remain relatively well anchored and the region continues to offer a broad mix of established global businesses, improving earnings prospects and valuations that remain attractive relative to some other developed markets.

Global Markets

Global markets continue to present a constructive but more selective investment environment. The S&P Global BMI Total Return Index was up 15.1% year-to-date at the end of August, while Japan and several emerging markets have also produced strong gains, illustrating that investment leadership has broadened beyond the US. At the same time, government bonds are facing pressure from higher oil prices, persistent inflation and large public-sector funding requirements. The key positive is that global growth has remained resilient and corporate profitability continues to support equities. With different economies moving through the cycle at different speeds, diversification across regions and asset classes remains particularly valuable, allowing investors to participate in areas of strength while reducing dependence on any single market outcome.

The Week Ahead

European inflation

Eurozone inflation data will be closely watched for evidence of how higher energy costs are feeding into consumer prices ahead of the European Central Bank’s September policy meeting.

US labour market

US job openings and Friday’s August employment report will be important indicators of whether labour demand is cooling materially or simply normalising after several years of exceptional strength.

Central-bank expectations

Markets will continue to assess the probability of September rate increases in the US, Europe and Japan, with changes in inflation, employment and energy prices likely to remain the main drivers of expectations.

PWM View

We remain constructive on the outlook for global investment markets as we enter the final months of the year. Equity returns have been supported by resilient earnings and continued economic growth, and importantly, positive performance has become increasingly broad across countries and regions rather than relying on a single market.

The current environment is also a useful reminder that markets rarely move in a straight line. Higher bond yields, changing interest-rate expectations and geopolitical developments can create periods of volatility even when the underlying economic and corporate backdrop remains sound. These shorter-term movements do not necessarily alter the longer-term investment case.

For investors, diversification remains one of the most effective ways to navigate these changing conditions. Different regions, asset classes and investment styles respond differently to inflation, interest rates and economic growth. Maintaining exposure across these areas allows a portfolio to benefit as leadership changes while reducing reliance on any one particular outcome.

Looking ahead, resilient global growth, healthy corporate profitability and a broader range of investment opportunities provide reasons for optimism. We believe investors who remain disciplined, appropriately diversified and focused on long-term objectives should be well placed to participate in future growth while managing the inevitable periods of uncertainty along the way.