Global Asset Allocation Team Market Update – June 2026

Global equity markets (+5.0%) reached a fresh high in May amid a surge in AI stocks and growing optimism around a potential ceasefire to the Middle East conflict. The S&P 500 (+5.1%) had a solid month, led by outperformance in the technology space (+15.9%). Meanwhile, the S&P/TSX (+2.4%) underperformed amid a pullback in the heavyweight energy (-3.1%) sector. Elsewhere, the MSCI EAFE (+2.6%) had a decent month, while the MSCI gauge of emerging market stocks (+9.5%) led the global charge – powered higher by continued inflows into stocks linked to the artificial intelligence boom.

Fixed income markets also generated positive results. In the United States, treasury yields pushed broadly higher. A growing chorus of Federal Reserve officials have pivoted towards a more hawkish stance amid mounting inflationary risks. Traders brought rate hike pricing forward in response, with the market consolidating around the view that the next move from the Federal Reserve will be a rate hike. By contrast, Canadian government bond yields edged lower following a softer-than-expected reading on both growth and inflation. That saw traders rein-in their wagers for Bank of Canada rate hikes this year. For the month, the Bloomberg US Aggregate Bond Index rose just 0.3% – while the FTSE Canada Bond Universe advanced 1.4%.

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