Global markets recovered in June as lower oil prices helped gains spread beyond a small group of leading stocks. However, the outlook remains uneven. Renewed tension between the United States and Iran, higher semiconductor valuations and a more hawkish Federal Reserve have increased the risk of further volatility in the second half of 2026.
The United States and Iran formalised a ceasefire in June through a Memorandum of Understanding. The agreement called for an immediate end to military operations, including those involving Lebanon. The United States also agreed to suspend sanctions for 60 days and began reducing the naval blockade that had restricted Iranian trade.
The agreement initially reduced pressure on energy markets. Shipping traffic through the Strait of Hormuz started to recover, and more operators became willing to send crude oil tankers back into the Persian Gulf. This lowered the immediate risk of a major disruption to global oil supplies.
Further attacks between the United States and Iran led President Trump to state that the tentative ceasefire was effectively over. This reduced the likelihood of near-term peace negotiations and raised the risk of renewed military escalation.
Oil prices increased as markets reassessed the threat to regional energy supplies. Even so, the rise was smaller than during earlier periods of tension, and prices remained below the highs reached at the peak of the conflict. Current pricing suggests that markets still expect both sides to avoid a prolonged confrontation that would seriously restrict global oil flows.
Semiconductor stocks remained a major source of market strength during the second quarter. Heavy spending on artificial intelligence infrastructure continued to support demand for advanced chips, memory and related equipment.
Micron and Intel led the latest rise while Nvidia and Broadcom paused after previous gains. Micron reported close to 350 per cent year-on-year revenue growth in its latest results. Strong memory demand and limited supply are expected to remain supportive through the rest of the year.
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