Markets have continued to deliver positive returns, although the investment environment has become more demanding. Global markets remained resilient in May, supported by strong US corporate earnings, but conditions are becoming more selective and increasingly dependent on quality. Higher oil prices and rising bond yields are reinforcing global inflation pressures and shaping a more constrained investment backdrop. The broad gains seen earlier in the cycle have given way to a more measured environment, where outcomes depend less on broad market exposure and more on active security selection. While income opportunities remain available, there is less margin for error as inflation pressures persist and interest rates are likely to remain higher for longer.