Global equities were flat in June but logged exceptional returns in 2Q—the best performance in more than six years. Fixed income performance was muted with dispersion across sectors, while commodity prices declined following the announcement of a temporary US-Iran ceasefire framework.

• Equity markets surged higher, buoyed by strong AI-related stock performance and cooling volatility as US-Iran tensions eased. MSCI ACWI returned 15.1%, marking its best quarter since 2020 and its third-best quarter of the past 20 years.
• Emerging markets led among regions, as Asia ex Japan gained 28%, with Korea and Taiwan benefiting the most from semiconductor and hardware exposure.
• Central banks remained cautious and mostly hawkish in 2Q: the Fed held rates steady but signaled a hawkish bias, the ECB resumed tightening with a rate hike, and the BOJ also raised rates as wage and price pressures persisted.
• The signing of an interim US-Iran ceasefire framework removed an immediate risk premium from energy markets. Brent crude oil, which had surpassed $120 per barrel in April, stabilized and ended the quarter at $71 per barrel. Shipping traffic through the Strait of Hormuz improved but remained well below pre-war levels.