{"id":2080,"date":"2026-09-02T10:52:44","date_gmt":"2026-09-02T09:52:44","guid":{"rendered":"https:\/\/www.redstarwealth.co.uk\/blog\/?p=2080"},"modified":"2026-09-02T10:52:44","modified_gmt":"2026-09-02T09:52:44","slug":"investment-market-update-august-2026","status":"publish","type":"post","link":"https:\/\/www.redstarwealth.co.uk\/blog\/investment-market-update-august-2026\/","title":{"rendered":"Investment market update: August 2026"},"content":{"rendered":"

After months of volatility, markets were relatively calm in August, though economic data was mixed. Discover what factors may have affected your investment portfolio throughout August 2026.\u00a0<\/span><\/p>\n

When markets opened on 3 August, it was a good start to the month. Falling oil prices led to the Stoxx Europe 600 index, which provides a broad measure of the European market, being up 0.5%. Similarly, US markets rose when they opened, with the S&P 500 index up 0.5%.<\/span><\/p>\n

However, the FTSE 100 remained flat, with oil giants BP and Shell dropping 2.8% and 2% respectively on the back of falling oil prices.\u00a0<\/span><\/p>\n

The positive performance in Europe continued on 4 August, when the Stoxx Europe 600 was up 0.62% thanks to rising corporate earnings, led by the industrial sector. London\u2019s mid-cap index, the FTSE 250, also reached a record high.\u00a0<\/span><\/p>\n

Throughout June and July, technology stocks experienced sharp falls amid concerns that AI companies were overvalued. On 5 August, technology stocks boomed, which could suggest some of the fears have eased.<\/span><\/p>\n

Asian markets in particular benefited from a jump in technology stocks, with Japan\u2019s main index, the Nikkei, up 3.6% and South Korea\u2019s Kospi rising 4.1%.\u00a0<\/span><\/p>\n

UK pharmaceutical company AstraZeneca saw shares rise 4% on 5 August after the company reported there were no discussions about a tie-up with US rival Bristol Myers Squibb (BMS). In contrast, SpaceX, which completed its initial public offering (IPO) in June, saw shares fall by around 12% after it revealed higher-than-expected capital expenditure.\u00a0<\/span><\/p>\n

Despite the US posting poor jobs data on 7 August, New York markets opened higher due to an interest rate hike now being less likely. The S&P 500 index was up 0.33%, while the technology-focused index, the Nasdaq, increased by 0.7%.\u00a0<\/span><\/p>\n

The middle of August was relatively calm, with markets remaining largely flat. On 24 August, ahead of sanctions being placed on Iran, Wall Street opened lower, including the Nasdaq declining 0.4%.\u00a0<\/span><\/p>\n

After years of speculation, Shein\u2019s IPO announcement was made on 24 August and was underwhelming. The company will list in Hong Kong with a valuation of $27 billion (\u00a319.8 billion), almost half the amount that was speculated.\u00a0<\/span><\/p>\n

Once again, technology stocks lifted markets on 25 August. The Nasdaq index was up 0.7% thanks to US inflation data and AI giant Nvidia.\u00a0<\/span><\/p>\n

In Europe, markets were mixed. The FTSE 100 was down 0.15%, and Germany\u2019s DAX increased by 0.65%. However, the main indices in Spain dropped and France remained flat.\u00a0<\/span><\/p>\n

UK<\/b><\/p>\n

The UK government will deliver the Budget in October. It will be John Healey\u2019s first Budget as chancellor and economic data could affect his decisions.\u00a0<\/span><\/p>\n

Figures from the Office for National Statistics (ONS) show GDP grew by 0.4% in the second quarter of 2026 thanks to the World Cup and good weather encouraging people to spend more. It follows growth of 0.6% in the first quarter of the year and represents a strong first half of 2026.<\/span><\/p>\n

However, professional services firm EY warned that the UK economy could fall into a recession if the Strait of Hormuz remains closed. The firm suggests GDP could fall to 0.5% in 2026 before contracting by 0.2% in 2027.\u00a0<\/span><\/p>\n

Further data from the ONS also wasn\u2019t positive. First, inflation was 2.9% in the 12 months to July 2026, compared to 2.6% in June, and above the Bank of England’s 2% target.\u00a0<\/span><\/p>\n

In addition, the UK had a larger-than-expected deficit of \u00a31.8 billion in July, which could signal some difficult decisions for the chancellor.\u00a0<\/span><\/p>\n

That being said, S&P Global\u2019s Purchasing Managers\u2019 Indices (PMI), which measure economic health, could suggest the economy is strengthening. In July, the readings revealed that:<\/span><\/p>\n