Top stocks and markets in 2026 so far

Rolls-Royce Holdings (LSE:RR.) and HSBC Holdings (LSE:HSBA) helped the FTSE 100 index outgun the Magnificent Seven in the first half of the year, but their gains were no match for the chip-powered advance of the Nasdaq 100.

The UK blue-chip benchmark rose by 5.7% to 10,457, with Lloyds Banking Group (LSE:LLOY) and Glencore (LSE:GLEN) among 39 of its current constituents up by 10% or more at the end of a volatile six months for global markets.

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However, this performance masks a disappointing run by the FTSE 100 since it surged by an initial 10% to a record close of 10,910 on the eve of the US-Iran war on 27 February.

The old-economy exposure of the FTSE 100 contributed to this subsequent weakness as heavily-weighted Unilever (LSE:ULVR), Reckitt Benckiser Group (LSE:RKT) and Aviva (LSE:AV.) all lost ground in the six months.

Fears of interest rate hikes due to the inflationary impact of the prolonged Strait of Hormuz closure left Persimmon (LSE:PSN) and Barratt Redrow (LSE:BTRW) among the year-to-date backmarkers.

Their declines of more than 20% were matched by RELX (LSE:REL), Experian (LSE:EXPN) and Sage Group (The) (LSE:SGE) after they failed to shake off earlier jitters about the threat of AI to their business models.

Pockets of tech sector weakness were also seen on Wall Street as big falls by Microsoft Corp (NASDAQ:MSFT) and Meta Platforms Inc Class A (NASDAQ:META) contributed to a $2 trillion value reverse for the Magnificent Seven in June.

The band of mega-cap stocks, which also includes Google owner Alphabet Inc Class A (NASDAQ:GOOGL), NVIDIA Corp (NASDAQ:NVDA), Apple Inc (NASDAQ:AAPL), Tesla Inc (NASDAQ:TSLA) and Amazon.com Inc (NASDAQ:AMZN), fell 2% across the first half as 2025’s exuberance has been replaced by fears about the outlook for returns on their massive AI investments.

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Despite the weaker Mag7 trends, the S&P 500 index still posted a series of record highs to finish the first half up by 9.6% at 7,499.

The tech-focused Nasdaq 100 rose by an even more impressive 19.9% as it benefited from the doubling of value by stocks including Advanced Micro Devices Inc (NASDAQ:AMD) and Micron Technology Inc (NASDAQ:MU).

With the AI boom leading to chip shortages and high memory prices, Deutsche Bank said the Philadelphia Semiconductor index has just recorded its best quarterly performance since the index began back in the early 1990s and has returned 102% so far this year.

The surge has carried across to other chip-focused markets after South Korea’s Kospi jumped 64% in the second quarter and Japan’s Nikkei 225 rose 39% in the first half, including its best quarter in dollar return terms since the first quarter of 1986.

Source: ShareScope. Past performance is not a guide to future performance.

Among UK beneficiaries, Polar Capital Technology Ord (LSE:PCT) shares rose 54% in the first half of this year as it includes Micron, Nvidia and Advanced Micro Devices among its top 10 holdings.

Scottish Mortgage Ord (LSE:SMT) Investment Trust lifted by 24%, driven by the run-up to June’s Space Exploration Technologies Corp Class A (NASDAQ:SPCX) IPO as the value of the £151 million investment taken in 2018 grew to more than £3 billion.

Polar Capital was only beaten to the top of the FTSE 100 year-to-date leaderboard by Beazley (LSE:BEZ), with the insurer up 55% after it backed a takeover by Zurich Insurance.

Broker Peel Hunt said today that the number and value of bids for UK companies was running at exceptionally high levels, with five FTSE 100 offers and a further nine in the FTSE 250. Other blue-chip deals have included Intertek Group (LSE:ITRK) and Schroders (LSE:SDR).

In contrast, the disruption of the Iran war has contributed to there being just one initial public offering (IPO) with a market capitalisation of more than £100 million.

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Since 2023, Peel Hunt points out that there have been 154 bids with a total value of £165 billion but only 11 £100 million-plus IPOs worth a total of £6 billion.

It added: “The scale of an equity capital market really does matter. As the US becomes a larger proportion of global indices, it attracts more funds, more companies, and more attention.

“The converse is also true. As the UK becomes a smaller proportion of the MSCI World (currently 3.5%), there will be pressure to reduce exposure. The launch of mega-IPOs in the US will inevitably exacerbate this trend as they increase free float and enter indices.”

One of the UK market’s most successful dealmakers has been the quality compounder Diploma (LSE:DPLM) after its shares added another 35% in 2026 to trade above 7,000p for the first time.

The controls, seals and life sciences business bolstered guidance on two occasions in the first half of the year, having benefited from favourable conditions in its key markets that include aerospace, defence, nuclear power and data centres.

Other shares to trade at record highs during the year included HSBC Holdings (LSE:HSBA), which recorded the bulk of its 22% advance prior to the start of the Iran war.

Source: ShareScope. Past performance is not a guide to future performance.

In contrast, Rolls-Royce shares drifted during the first quarter before a surge of 33% between 1,098p at the end of April and last night’s record close of 1,470p.

The acceleration followed forecast-beating annual results, a recovery for engine flying hours and then a contract win with Sweden’s Vattenfall, which means Rolls-Royce has been successful in every competitively tendered small modular reactor (SMR) selection process in Europe.

BAE Systems (LSE:BA.) shares, meanwhile, have fallen 11% since the start of the Iran war but remain 7.7% higher for the year after they posted a record high of 2,360p in mid-March.

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BP (LSE:BP.) and Shell (LSE:SHEL) shares finished the half-year back at pre-war levels as Brent crude followed its biggest price jump since 1990 with its biggest quarterly decline since the pandemic.

The shares of BP topped 600p at the end of March amid optimism that excess cash from much higher energy prices will accelerate the pace of its balance sheet deleveraging. However, they finished June back at 458p, representing a rise of 8% year to date.

Precious metal miners Fresnillo (LSE:FRES) and Endeavour Mining (LSE:EDV) have also fallen back sharply after expectations of higher US interest rate rises caused the price of non-yielding gold to slide from record levels above $5,000 an ounce.

Source: ShareScope. Past performance is not a guide to future performance.

Gold dropped 14.1% and silver by 22% in the second quarter, representing their worst performances since the middle of 2013 after a run of five consecutive quarterly gains.

Both metals are now negative on a year-to-date basis, with gold down 7.2% and silver off 18.2%. Deutsche Bank said: “That’s a far cry from where they started the year, as January marked gold’s best monthly performance since September 1999.”