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9th October 2026
Cappuccino Commentary
September 2026 Review
The quarter ending in September was a strong period for the global equity market, but this statement hides a lot of what was occurring under the bonnet. The global equity index was lifted in September mainly by the strong performance in the US market, while other regions delivered negative returns, reversing some of the strong gains we’d seen over the summer months.
The US equity market posted a positive return of +2.9% in Q3. As this is such a large proportion of the global index, this helped the global benchmark return +2.4%. However, we need to look at things a little closer. The conflict in the Middle East has been raging on, and this is having several impacts. Energy & oil prices are being driven higher driving up the expectations for inflation and the potential requirement for central banks to have to raise interest rates to combat it. Over the month the real (and only winners), were the technology and Artificial Intelligence (AI) related stocks. This is best shown in the performance of the US’s tech index which delivered over +3% return in September alone, driven by robust AI capital expenditure. This growth also arrived despite the existential threat posed by superintelligent AI finally entering the mainstream discourse. In the month since Jacob Coxon’s tweets went viral, the US tech index is up 4.46%. Despite calls from across the political and academic worlds, the AI race remains (for now) an effectively regulatory-free endeavour, with Trump and the US AI leaders agreeing to a voluntary accord upheld by some “morally binding” “self-policing”. In contrast to tech, the industrials part of the US market (or anything interest rate sensitive) declined -4%. We can see here the huge divergence opening up in performance within the US equity market.
The UK markets delivered +1.8% in Q3 despite concern over energy prices, inflation and interest rate expectations having a dampening effect on Europe (-2.1%). Trump’s threat to introduce an oil export ban forced European leaders to release 100mn barrels of oil supplies. The EU imported 18.8% of its oil from the US during Q2, so a pre-Midterms ban to try and drive down US domestic prices would have a massive impact on European prices. The Japanese market had positive returns of +6.0%, and Asia ex Japan rose +4.6%, whilst the emerging markets declined by -1.08%. Most of the Japanese returns came from the strength in the Yen, which rallied strongly after further interest rate hikes by the Bank of Japan (BoJ). With the weakness in sterling helping UK investor returns from emerging market regions over the month, this was also coupled with significant policy intervention from China in September, which improved the poor returns there. Beijing pumped over £40bn into the financial system, while also looking to support certain mortgage subsidies and increased bank lending quotas. This was all received positively by the market.
On the back of the conflict in the Middle East and rising oil prices, interest rate hike expectations increased. This led to all parts of the bond market delivering negative returns.
Emerging market debt (-4.7%) and global corporate bonds (-3.7%) were the hardest hit parts of the bond markets. Much of those negative returns being generated in September. Other interest rate sensitive assets also suffered over the month, with property pulling back -7.0% and infrastructure -4.6%. Across commodities (just like across equities) the return profile was mixed. Gold rose 3.1% in the quarter but this masked a drop of nearly -7% on the back of a strong dollar in September, coupled with rising bond yields and expectations of aggressive interest rate tightening by the Federal Reserve.
All in all, very mixed outcomes across and within different asset classes.
Please note:
For regulated financial advisers and investment professionals only. Copia does not provide financial advice, and the contents of this document should not be taken as such. The value of investments can increase and decrease, past performance and historical data cannot guarantee future success, and any references to individual stocks or asset classes are made purely for illustrative purposes.
The performance of each asset class is represented by certain Exchange Traded Funds and Passive Funds available to UK investors and expressed in GBP terms selected by Copia Capital Management to represent that asset class, as reported at last UK market close before the end of the calendar month. Reference to a particular asset class does not represent a recommendation to seek exposure to that asset class. This information is included for comparison purposes for the period stated but is not an indicator of potential maximum loss for other periods or in the future.