Markets never stand still.
Every day brings another headline of uncertainty, market volatility or the next big investment opportunity. But successful investing has never been about reacting to headlines.
Each month, our wealth advisers share the five developments they’re watching most closely, explaining what matters, what doesn’t, and how we’re thinking about the bigger picture.
Here’s what’s on our radar this month.
MIDDLE EAST TENSIONS REMAIN
Geopolitical events continue to dominate the news agenda, but their impact on markets often comes down to one thing: energy supply.
Following the escalation with Iran at the beginning of March, markets quickly priced in the possibility of a higher oil price, higher inflation and fewer interest rate cuts across developed economies. Higher oil prices ripple through everything from transport and manufacturing to household spending, making inflation harder to control for central banks.
The ceasefire helped calm markets, with oil prices falling back towards pre-conflict levels. But the recent re-escalation of the conflict has once again led to rising oil prices and uncertainty over interest rate levels for the rest of 2026.
The key question now is whether the US and Iran will resume the ceasefire talks and make meaningful progress.
If tensions remain contained, markets are likely to refocus on company earnings, economic growth and continued investment into areas such as artificial intelligence.
If the conflict rapidly escalates and spreads again across the Middle East, higher inflation and tighter monetary policy could quickly return to the agenda.
MARKETS REACT FASTER THAN MOST PEOPLE EXPECT
One of the biggest misconceptions in investing is that markets wait for certainty.
They don’t.
Financial markets continuously price in expectations about future events, often long before those events fully unfold.
We’ve already seen investors rapidly adjust expectations around inflation, interest rates and economic growth over recent months. In many cases, markets have moved well before the wider news cycle catches up.
It’s a useful reminder that trying to second-guess short-term movements is incredibly difficult. By the time a story dominates the headlines, markets have often already responded.
THE US REMAINS THE ENGINE ROOM OF GLOBAL MARKETS
While political events often grab attention, company earnings continue to be one of the biggest drivers of long-term market performance.
The US economy remains remarkably resilient, supported by continued investment in technology, AI infrastructure and innovation.
Alongside geopolitical developments, investors are also watching the US Federal Reserve following the appointment of its new Chair. Monetary policy decisions made in the US continue to influence markets across the globe, making them far more significant than developments in any other single domestic market.
For globally diversified investors, what happens in America often has a much greater impact than political developments closer to home.
UK POLITICS IS BECOMING MORE IMPORTANT… BUT IT’S STILL TOO EARLY TO JUDGE
Closer to home, there’s growing interest in what a new political direction could mean for investors.
With Andy Burnham now leading the government, attention is naturally turning towards fiscal policy, spending plans and the next Budget. The appointment of John Healey as Burnham’s new Chancellor wasn’t expected, and we might expect defence spending plans to figure in Healey’s first Budget, given his previous Defence Minister role.
The gilt market, often one of the first indicators of investor confidence in the UK government’s finances, isn’t yet signalling significant concern. That said, the benchmark 10-year gilt yield once again topped 5% on Burnham’s first day – that’s higher than under Liz Truss’ ill-fated mini-Budget of September 2022.
Markets will also be hoping that this Chancellor Healey doesn’t follow Dennis Healey, the Labour Chancellor, who in 1976 had to negotiate the UK’s bailout with the IMF!
Over the coming weeks we’ll begin to get a clearer picture of the government’s priorities, making this a topic we’ll revisit ahead of the Budget with practical guidance for individuals and business owners.
LONG-TERM INVESTING STILL WINS
Periods like these are exactly why having a financial plan matters.
Markets have always experienced wars, elections, political change, inflation, recessions and unexpected events. Despite this, patient investors have been consistently rewarded for taking the longer-term view.
Rather than trying to predict every twist and turn, our focus remains unchanged:
- Stay diversified.
- Stay disciplined.
- Stay invested.
- Stay focused on your long-term financial plan.
Diversification helps reduce the impact of uncertainty across different regions and asset classes, while remaining invested means you’re well positioned to capture the upside of positive markets as and when they happen.
LOOKING AHEAD
On the next edition of The Investment Brief, we’ll take a closer look at the UK’s changing political landscape as more policy details emerge.
We’ll also explore what the next Budget could mean for individuals, entrepreneurs and business owners, including practical tax planning considerations worth thinking about before any announcements are made.
MY FINAL THOUGHT
Markets will always give us reasons to worry. History shows they also give us reasons to stay invested.
The challenge isn’t to predict the future; it’s having the faith, patience and discipline to stick to a well-constructed financial plan. That’s exactly what we’re here to help you do.
Whether you’re looking to invest or you’d like a second opinion, our team is always here if you’d like to chat.
Past performance is no guarantee of future returns, and the value of investments and the income from them are not guaranteed and can fall as well as rise. The returns from your portfolio will fluctuate over time. On encashment of your investment, you may not get back the full amount invested and could lose part or all of your capital. This communication is for general information only and is not intended to be individual advice. This article contains the opinions of the author but not necessarily the Firm and does not represent a recommendation of any particular investment strategy or product. You are recommended to seek competent professional advice before taking any action.
