Fidelity equities monthly sep 2026

Strong earnings meet a higher hurdle rate

Fidelity International’s outlook from the Equities investment team

For investment professionals only

Executive summary: 3 August unwound much of July’s AI- and growth-led sell-off, but equities enter September with a more demanding backdrop. Earnings remain exceptionally strong, while higher energy prices are complicating the inflation and monetary policy outlook. If higher energy prices persist, this could prolong inflationary pressures, constrain monetary easing and keep global bond yields elevated. This raises the cost of capital across markets and makes valuations harder to justify, particularly for longer duration companies.

Trading desk update 5 AI leadership returned in August as strong earnings restored confidence in demand and monetisation, while growth and momentum rebounded across regions despite rising bond yields. The outlook is becoming more sensitive to rates and geopolitics, with persistent inflation, hawkish central banks and renewed Middle East tensions raising the hurdle for further equity gains..

Japan’s next leg needs to be earned 6 July’s correction exposed crowded AI trades rather than undermining Japan’s structural recovery. The next phase should increasingly reward earnings delivery, pricing power and capital discipline. Reflation, corporate reform and rising investment are broadening the opportunity set beyond technology, creating opportunities across financials, industrials, infrastructure and automation.

Market review 7 A review of last month's developments by regional equity markets.

Earnings scorecard 10 Our longer-term earnings scorecard is most bullish compared to consensus on Asia Pacific ex-Japan and communication services, and most bearish on Japan and materials.

Quantitative scorecard 11 Our quantitative tactical scorecard upgrades Canada, UK, Sweden, and Norway, and downgrades France, netherlands, Japan, Hong Kong, and Australia. We remain overall risk on.

Market data 12 Markets returns, valuations and forecasts.

2 Strong earnings meet a higher hurdle rate Fidelity International Equities Monthly | Sep 2026