European and UK Equity Capital Markets Review June 2026

• Equity markets have had a very strong quarter ending 30th June, although June itself was more volatile and marked by a ‘pause’ in the move higher for most indices. The pause came despite the US and Iran finally reaching agreement on a path to deescalation (although risks remain), pushing oil prices sharply lower and easing concerns about global inflationary pressures. The resumption of shipping through the Strait of Hormuz saw oil prices fall to close the month at c.$73/bbl. Resilient earnings and robust macroeconomic data also supported equities into month-end. Whilst June was a little more volatile, global equity markets have navigated the Middle East conflict, rising oil prices and resulting inflation concerns to be firmly in positive territory for the first half of the year with most major indices up c.5-15% YTD with Taiwan, Korea’s Kospi and the Nikkei outperforming (up 61%, 92% and 39% respectively) . Over the month the FTSE was +0.8%, FTSE 250 -1.8%, Stoxx600 +2.5%, S&P500 -1.1%, Nasdaq -2.8%, Russell 2000 +3.6%, the Kospi +0.0%, the Hang Seng -9.1% and the Nikkei +5.6%.
  
  
• The AI ‘vertical’ was very much in focus over the month as investors grappled with the hyperscalers’ significant on-going capex plans relative to longer-term revenue capture as well as current shortages in many of the ‘inputs’ – in particular semiconductors / compute capacity. The stock price winners over June (and 2026 YTD) included those providing the components and infrastructure to fuel AI development, e.g. ASML (+25% in June, +c.100% YTD), TSMC (+14% in June, +c.60% YTD), Hynix (+12% in June, +c.300% YTD) and Micron (+19% in June, +c.300% YTD).
  
  
• A robust Q126 corporate results season has helped equity markets to counterbalance geopolitical concerns, with technology companies in particular delivering strong growth, cloud capacity providers maintaining aggressive investment plans and AI infrastructure spending showed few signs of moderation despite questions over valuation. The willingness of companies to continue investing heavily suggested executives themselves stayed optimistic regarding future demand. Markets responded by rewarding businesses delivering credible AI-driven earnings while becoming noticeably less forgiving towards companies missing expectations.
  
  
• Kevin Warsh held his first meeting as Fed Chair in June. Whilst the market had expected President Trump’s pick to be dovish, his tone has been notably hawkish, seen by many as needed to establish his credibility and independence from President Trump’s influence. Despite Warsh stressing his determination to return inflation to target, from which markets deduced US rates may be higher for longer, the continued easing of oil prices over the month has helped to reduce inflation concerns and thus rate expectations, which had spiked immediately following the outbreak of hostilities in the Middle East.
  
  
• SpaceX’s IPO, the largest in history by a factor, successfully priced in June, raising $85.7bn to yield an initial valuation of $1.77tn, placing the firm amongst the top 10 largest companies in the US. Originally pricing at $135 a share, the shares rallied strongly on listing, rising above $200 a share in mid-June. This gave the company a market cap of well over $2tn but this then fell towards the end of the month as concerns over the valuation impacted shares. Outside of SpaceX, US equity capital markets are expected to remain very busy with the IPOs of both Anthropic and OpenAI expected following confidential SEC filings (although OpenAI may now not be until 2027).
  
  
• In Europe, ECM volumes have continued to hold up relatively well, with European ECM issuance of $94.1bn for 2026 YTD, marginally above the 10-year average, and significantly ahead of the comparative period in 2025. Whilst April was quieter as the Middle East conflict delayed some processes, strong equity markets aided a pickup in issuance in May and June. In the UK there has been an improvement in ECM activity with the number of transactions in H126 up on H125 although IPO activity remains subdued.
  
  
• Notable deals in June include German energy company RWE’s €4.6bn fundraise for its acquisition of a 35% stake in German electricity transmission operator Amprion (the largest primary ABB in German history), Permira’s sell down of its $1.2bn stake in Allegro, and Pershing Square’s sell down of its $1.7bn stake in Universal Music Group. UK ECM activity remains below 2025 by deal value but significantly ahead by number of deals. UK IPO activity has been relatively subdued YTD, but the pipeline of potential transactions over the medium term provides for optimism.
   

• Equity markets began 2026 strongly, with European indices continuing the 2025 trend to outperform the US. The outbreak of the conflict in the Middle East saw a global markets sell-off, driven by turmoil in energy markets following the closure of the Strait of Hormuz through which a material proportion of the world’s energy and chemical needs typically pass.
• Whilst it took time reach an interim agreement, the ongoing negotiations between the US and Iran were enough to encourage global markets to recover their initial losses over April and May. US equities also reversed their early underperformance, outperforming other regions given a robust Q126 earnings season for corporate America, a higher level of energy independence inherent within the US economy (particularly relative to Europe or Asia) and a strong rebound in AI, technology and semi-conductor stocks. The ‘AI trade’ pivoted over June, away from hyperscalers to those benefitting from their massive spending, in particular chip manufacturers.
• In the UK for June the more domestically focused FTSE 250 underperformed its more internationally exposed FTSE 100 counterpart finishing the month down 1.8% as political uncertainty became a feature once again for the country. The FTSE 100 was up 0.8% for the month however. The resignation of Prime Minister Keir Starmer and the expected ‘coronation’ of Andy Burnham in his place has arguably had less impact on UK equity or gilt markets than might have been expected, but plenty of questions remain as regards to the shape of the UK Government’s policy focus. For June the FTSE AIM 100 closed down 6.9% and FTSE Small Cap flat. Elsewhere in June, the Stoxx 600 was up 2.5%, S&P 500 down 1.1%, Nasdaq down 2.8% and Russell 2000 up 3.6%.

• At the start of 2026, US Big Tech valuations came under pressure as investors grew increasingly concerned over large capex commitments and higher costs. Those investor concerns were evident in the early part of 2026 with asset allocations away from US (large cap) tech, but strong results subsequently helped restore a level of confidence in the AI thematic.
• UK equity market valuations continue to lag the US. However, adjusting for growth it is arguably fewer high-growth opportunities rather than an inability to value growth that drives the differential.
• Whilst all global indices were impacted by the Middle East conflict and a resulting drop in valuations, the market recovery has been accompanied by a robust Q126 earnings season (particularly in large cap tech & AI related segments) such that earnings multiples have not (re)expanded in line with the market bounce back.
• UK indices remain close to or below longer-term averages and look attractive relative to other markets.

• UK May CPI inflation surprised to the downside, holding steady at 2.8% instead of an expected rise to 3.0%. Core inflation was similarly benign, rising to 2.6% from 2.5%, below consensus expectations of 2.7%.
• After higher energy prices pushed up Eurozone inflation in May to 3.2%, inflation fell to 2.8% in June, which was below the consensus forecast for 3.0%, whilst core fell to 2.4%. In the US, CPI inflation for May rose to 4.2% from 3.8%, with core inflation rising to 2.9% - US CPI was 2.4% at the start of 2026. The pickup in the headline rate relative to the start of the year can largely be attributed to the increase in gasoline prices. These increased by 21% on the month in March, another 5% in April and 7% in May.
• The impact of higher energy prices through May on the global economy is arguably still to be fully felt, but with spot oil prices now back around pre-conflict levels it seems likely that the worst outcomes markets feared this spring will be avoided.
   

• Downside risks to growth in Europe have diminished given the MoU agreed between the US / Iran and resulting oil price declines but the outlook is still subdued relative to estimates at the beginning of the year.
• Whilst inflation risks remain a concern, recent oil price declines are reflected in the June BAML investor survey, which shows European investors now see the decline in energy prices and potential for easing inflation as the largest upside risk for global growth.
• Within Europe, Germany remains most favoured due to its fiscal policy and defence spending, whilst the UK and France have fallen on further political uncertainty.

IPO issuance in Europe

• US$1,141m raised from 18 IPOs in June 2026 across Europe, with an average deal size of US$63m. There were 9 IPOs greater than US$50m, and 3 IPOs greater than US$100m including Polish real estate developer Robyg ($314m), Danish technical installation group InstallatorGruppen ($162m), and Swedish industrial investment group Tangen Industrikapital ($109m).
• In 2025, there were 49 IPOs greater than US$50m, raising $17.8bn in total, with an average issue size of $363m (vs 47 IPOs in 2024, generating $17.9bn, with an average of $381m).
• IPOs pricing post April, and the easing of Middle East tensions, have seen improved aftermarket performance.
• Elevated volatility in 2026 has seen shorter execution windows to allow issuers to mitigate market risk and also led some European IPO processes to be delayed.
• There is still a gap to close in terms of European IPO activity to reach 10-year averages, but the medium-term pipeline is healthier than it has been in prior years with a number of flagship assets preparing and monitoring market conditions / execution windows.