Spring 2026 was marked by volatility, cautious optimism and persistent inflation concerns across global markets. In the UK, inflation eased modestly, with CPI falling from 3.3% in March to 2.8% in April, while the Bank of England kept rates at 3.75%. The FTSE 100 recovered from March’s weakness, supported by defensive sectors and exporters, and later by a rebound in cyclical stocks. Bond markets remained sensitive to energy prices, inflation and fiscal policy, while sentiment improved slightly as consumer confidence and retail-related shares recovered.

In the Eurozone, markets opened on a volatile note as the Middle East conflict and higher oil prices weighed on sentiment, particularly for consumer and software stocks. Inflation rose from 2.5% in March to 3.2% in May, while business activity weakened, keeping the ECB cautious. A strong May rebound lifted cyclical sectors such as industrials and banks, though underlying growth remained fragile.

Investors in the US experienced sharp swings between optimism and concern. Geopolitical tensions, particularly around Iran and the Strait of Hormuz, pushed oil prices higher and unsettled markets. Despite a weak first quarter, US equities rebounded strongly in April and May, led by large-cap technology and AI-related stocks. Inflation remained sticky, the Fed kept rates at 3.5% to 3.75%, and consumer confidence stayed weak even as equity markets hit record highs.

Japanese equities rebounded after a March correction, led by AI-related technology shares and banks. The Bank of Japan kept rates unchanged at 0.75% but adopted a more hawkish tone amid persistent inflation concerns.

Across Asia, excluding Japan, and in emerging markets, March sell-offs gave way to strong April recoveries, driven by easing oil prices and sustained AI demand, particularly in Korea and Taiwan. Finally, global bond markets struggled with rising yields as inflation, fiscal concerns and geopolitical risks led investors to demand higher compensation for uncertainty.