Market Update June 2026

June delivered what the market had been waiting for. On 14 June, the United States and Iran signed the “Islamabad MOU”, an initial framework that extends the ceasefire for sixty days, reopens the Strait of Hormuz, and sets the ground for negotiations on sanctions, frozen assets and the nuclear file. Oil fell sharply on the news, with Brent trading briefly near $70 a barrel, and equity markets welcomed the removal of a war premium that had dominated pricing for four months. The mood was not entirely settled. Peace talks in Geneva were abruptly postponed on 19 June, and a fresh round of US-Iranian strikes over the last weekend of the month reminded investors that the deal still has to survive the diplomacy that follows it. The two big central bank stories of the month pulled in opposite directions. The ECB raised rates by 25 basis points on 11 June, its first hike since 2023, judging that the inflation impulse from the war had to be met head-on. A week later, Kevin Warsh chaired his first FOMC meeting, held rates steady, and set an unmistakably hawkish tone: the dot plot flipped from cuts to hikes, the policy statement was cut to a terse 130 words, and short-dated Treasury yields recorded their biggest Fed-day move since 2008.

Geopolitical Developments

The war between the United States and Iran, which had shaped every market since February, entered a new phase in June. On 14 June, President Trump and Iran declared an initial agreement described as the “Islamabad MOU”, named after the country that mediated the framework. The deal extends the ceasefire by sixty days, reopens the Strait of Hormuz to commercial traffic, includes a reaffirmed Iranian commitment not to develop a nuclear weapon, and lays the ground for a further round of talks on sanctions, frozen assets, and a permanent peace treaty.

The initial reception was positive across capitals. European leaders from the United Kingdom, France, Germany and Italy welcomed the deal and called for swift implementation. Markets moved fast: oil dropped, equities rallied, and long-dated bond yields fell as the geopolitical premium came out.

The truce is not yet stable. On 19 June, the follow-up peace talks scheduled in Geneva were abruptly postponed, and Brent moved back up on the news. In the final weekend of the month, a fresh exchange of US and Iranian strikes near the strait renewed doubts about a full reopening. By 29 June, Washington and Tehran had again agreed to halt hostilities and allow commercial vessels through the strait, and oil crossed back above $70. The direction of travel is clearly toward resolution, but the road is not smooth.

Market Developments by Asset Class

Equities

The S&P 500 snapped a two-month winning streak. The index finished June at 7,499.36, down 1.06% on the month but still up 9.55% for the year. Weakness came almost entirely from technology, and specifically from a pullback in the semiconductor complex, which had rallied more than 80% in the first half of the year. Investors sold to lock in gains as the ECB hiked, the Fed turned hawkish, and yields rose. The pan-European STOXX 600 finished 30 June essentially flat, with technology helping offset weakness in telecoms and construction. The SMI added 0.4% on the last session of the month.

Sector rotation remained the main feature under the surface. Airlines, transport and consumer discretionary sustained gains as oil fell. Banks in Europe advanced on the ECB’s move to higher policy rates. Energy gave back further ground as crude weakened. Defensives lagged in the risk-on tape until the last week of the month, when the mixed geopolitical headlines and the Warsh-led hawkish repricing gave them a modest bid.

In Switzerland, the trade backdrop remained framed by the November 2025 US-Switzerland agreement, which caps tariffs at 15% including pharmaceuticals. Section 232 pharma tariffs from 31 July will apply at the 15% Swiss and Liechtenstein cap. EUR/CHF traded around 0.92, with the SNB reiterating that its readiness to intervene in foreign exchange markets remains high.

Bonds

The Fed and the ECB moved in opposite directions in the same week. On 11 June, the European Central Bank raised its three key policy rates by 25 basis points, effective 17 June. The deposit facility rose to 2.25%, the main refinancing rate to 2.40%, and the marginal lending facility to 2.65%. It was the ECB’s first rate increase since 2023. Christine Lagarde said the war in the Middle East is generating inflation pressures and that the decision holds up across a range of scenarios for how the shock may evolve. ECB staff raised the 2026 inflation projection to 3.0%, from 2.6% in March, with core inflation seen averaging 2.5%. Growth expectations were cut.

On 17 June, Kevin Warsh chaired his first FOMC meeting. The Committee voted unanimously to keep the federal funds rate at 3.50% to 3.75%. The signalling was much more hawkish than the vote suggested. The statement was pared down to just 130 words, from 341 in April. Language biased toward cuts was removed. The dot plot flipped: nine of the eighteen participants now project at least one rate hike before year-end, and six project two 25-basis-point hikes. Warsh himself declined to submit a projection. He confirmed at the press conference that he is setting up five task forces to review Fed operations, communications, data sources, productivity and the causes of inflation.

The bond market repriced immediately. The 2-year US Treasury yield jumped more than 16 basis points on the meeting day, its biggest one-day move on a Fed decision since March 2008. The 10-year yield ended June around 4.38%, up from the mid-4.20% range earlier in the month, and rose toward 4.46% into the start of July as Warsh signalled a preference for reducing the Fed’s holdings of Treasuries. The Swiss National Bank kept its policy rate at 0% at its June meeting. It now forecasts inflation to average 0.6% in 2026 and 2027, and growth of 1.0% and 1.5% respectively, and repeated its willingness to intervene in FX markets if the franc becomes excessively strong.

Real Estate (Switzerland)

The Swiss real estate backdrop remains supportive. The SNB policy rate is at 0%, and the June meeting gave no signal of change. Swiss CPI rose 0.6% year on year in May, in line with April and just below the 0.8% consensus, with housing, energy and transport carrying most of the increase. The number sits comfortably in the SNB’s target band and leaves financing conditions attractive.

Prime urban residential still faces excess demand relative to supply, and listed Swiss real estate has continued to behave as a stable diversifier in CHF portfolios. The gradual removal of the war premium in commodity prices should keep inflation risks contained and support the case for rate-sensitive assets over the second half of the year.

Commodities

Oil was the biggest mover. Brent crude was trading in the low $80s at the start of June and fell to the low $70s in the immediate aftermath of the Islamabad MOU, with brief intraday moves close to $70. It ended the month near $73. WTI traced the same pattern and closed near $70. The path was volatile: the abrupt postponement of Geneva talks on 19 June and the weekend strikes at the end of the month each pushed prices back up by roughly 1% to 2% in a session. Consensus now looks for Brent to trade in a $70 to $80 range through the summer, subject to how the follow-up negotiations progress.

European TTF gas eased further as LNG flows normalised. Industrial metals traded mixed. Copper stayed supported on the broader risk backdrop. Palladium and platinum remained under pressure.

Gold gave back ground for a second month running. Prices fell below $4,000 an ounce briefly, ending June near $4,090. The metal is now down around 7% year to date, having peaked at $5,589 on 28 January. The pullback reflects three overlapping forces: a firmer dollar as the Fed turned hawkish, higher real yields, and the removal of the acute Middle East risk premium. Central bank buying continues at pace, and Goldman Sachs still expects gold above $5,000 by year-end, but positioning has been reduced.

Everon Strategies and Portfolio Positioning

Income Strategies

Income EU Equities delivered +15.68% year to date, ahead of the iShares STOXX Europe Select Dividend 30 benchmark at +13.19%. That is roughly 250 basis points of outperformance. The strategy benefited from Europe’s shift in the rate narrative, and in particular from the ECB’s June hike, which lifted dividend-paying financials. Consumer discretionary and industrial names also contributed as oil fell and European cyclicals participated in the broader recovery.

Income Global returned +8.08% year to date. The broader geographic reach dilutes the European rate-hike tailwind that supported the EU mandate, but adds diversification across regions and dividend styles.

Multi Factor Strategies

Multifactor North America Equities is up +12.58% year to date, against +10.14% for the SPDR S&P 500 ETF Trust, an outperformance of around 240 basis points. The strategy came through the June semiconductor pullback with less drawdown than the index, helped by its more balanced factor exposure and its tilt toward mid-cap names that are underrepresented in the S&P 500.

Multifactor Europe Equities returned +16.70% year to date, against +12.34% for the iShares Euro Stoxx ETF. At more than 430 basis points ahead, it is now the standout across our factor mandates. Financials, one of the largest active exposures in the strategy, benefited directly from the ECB’s rate hike on 11 June. Value performed well as banks and cyclicals took over from technology, and quality remained a solid contributor throughout the period.

Chart 1: Multifactor Europe Equities versus iShares Euro Stoxx ETF, year-to-date performance. Source: Everon AG, own calculation; market data: Refinitiv.

Multifactor Global rounded out the factor line-up with +12.23% year to date. The global mix combines exposure to the European rate-driven rally and the US leg of the market’s advance, and has kept the strategy competitive against passive global equity exposure through a year of very uneven regional leadership.

Outlook

The macro path into the summer depends heavily on whether the Islamabad framework holds. A durable deal would see Brent settle in the $70s, take the last of the war premium out of inflation prints, and hand central banks a much more benign backdrop. That would leave the ECB’s June hike looking like a peak, and would take the more hawkish tail out of Warsh’s dot plot. A collapse in the follow-up talks would push oil back toward $90, keep inflation stubborn in Europe, and validate the Fed’s hawkish turn.

Several variables matter over the coming weeks. The substance of the follow-up US-Iran negotiations is at the top of the list, with sanctions relief, frozen assets and the nuclear file all on the table. Kevin Warsh’s early public appearances and the outputs of his task forces will shape US rate expectations. Q2 earnings season starts in mid-July, and the bar has been raised by the strong first-half performance in AI-linked names.

For Swiss investors, the franc’s structural strength remains intact, with EUR/CHF near 0.92 and the SNB signalling continued readiness to intervene. Our portfolios favour breadth over concentration, quality over pure momentum, and selective exposure to themes that benefit from the eventual normalisation of energy markets. Discipline on position sizing and sector spread remains our anchor.

Your Everon Investment Team