Investment update - May 2025
read
Published on 26 June 2025Global markets rallied in May as easing US-China trade tensions revived risk appetites. US equities surged, with the S&P 500 up 6.2% and the Nasdaq climbing 9.6%, driven by resilient corporate earnings and investor optimism around artificial intelligence. European and Asian markets also recovered, largely retracting the ‘liberation Day’ losses from previous months. Despite the rebound, uncertainty lingers as the direction of US tariffs remains unclear and the risk of re-escalation in global trade tensions remains high.
Australia’s economy grew modestly in the March quarter, with GDP up 0.2% and annual growth slowing to 1.3%, partly due to severe weather events in Queensland and northern NSW. Inflation eased to 2.9%, prompting the Reserve Bank of Australia to cut rates by 25 basis points to 3.85%. Labour market conditions remain stable, though sentiment indicators still point to cautious consumer and business outlooks.
Across Europe, Q1 growth improved, and inflation slowed, prompting both the European Central Bank and Bank of England to reduce interest rates. Japan and China, however, faced renewed pressure from weaker exports due to US trade policy uncertainty.