Global Markets
The Dow Jones Industrial Average and the S&P 500 fell for a fifth consecutive week, their longest losing streak in nearly four years, with the S&P 500 dropping 1.67% and the Nasdaq declining 2.15% to close at their lowest levels since August. The week was defined entirely by ceasefire whiplash.
Monday delivered a sharp relief rally after President Trump announced a five-day pause on strikes against Iranian energy infrastructure, with the Dow jumping 631 points, oil plunging nearly 11%, and all three major indices briefly surging more than 2% before gains faded as Iran denied that any direct talks had taken place. That optimism quickly unravelled as the week wore on.
Iran formally rejected the US ceasefire proposal mid-week, laying out its own five-point counteroffer that included demands for control over the Strait of Hormuz, a condition the US treated as a non-starter. Oil ended the week with Brent crude back near $112 per barrel, its highest since the conflict began, as investors grew increasingly sceptical that diplomatic efforts would deliver a resolution before the military pause expired.
The OECD added to the grim backdrop by lifting its 2026 US inflation forecast to 4.2%, sharply above the Federal Reserve’s own projection of 2.7%, citing the war’s sustained impact on global energy prices. The 10-year US Treasury yield pushed to 4.43%, its highest since July, as hopes for rate cuts continue to evaporate.
Australian Markets and ASX 200
The ASX 200 closed Friday at 8,516, down on the week and roughly 9% below its all-time high of 9,202 reached in late February, with the AUD/USD near 0.6873 as risk appetite remained subdued. The local market tracked the global ceasefire narrative closely, bouncing sharply on Monday before surrendering those gains as the diplomatic picture deteriorated. The index hit a 10-month low mid-week before finding some support, though analysts note it must reclaim the 200-day moving average around 8,776 on a sustained basis before any meaningful recovery can be declared.
Financials continued to outperform, with the prospect of an extended high-rate environment supporting bank net interest margins, while energy stocks held firm on elevated crude prices. Materials and resources remained under pressure, with gold miners particularly hard hit as the metal retreated sharply.
Globally, the S&P 500 is now down 5.8% year-to-date and the Nasdaq 8.1%, with only commodities in positive territory: oil up 28%, gold up 35% from its 2026 lows, and defence stocks up 22%. The local picture is similar, with the ASX down over 3% for the year, and markets increasingly pricing in three further RBA rate hikes by year-end. That would push the cash rate to 4.85%, its highest level since 2008.
A Message From Our Founder
Another week, another round of headlines with no clear resolution in sight. What we are seeing now is the conflict moving beyond equity markets and into the real economy in ways that will take time to fully play out. Building costs, which had only just begun to settle after the post-Covid surge, are climbing again as energy and materials prices feed through the supply chain. Less visible but equally important, fertiliser prices have spiked sharply, and when that flows through to food production costs, we will have another inflation driver that central banks will struggle to look past.
The downstream effects of sustained energy disruption are not quick to reverse. Even if a ceasefire were announced tomorrow, the physical supply chain damage, the shuttered wells, the rerouted shipping and the repriced inputs would take months to unwind. That is the part of this story that markets are still coming to terms with.
In that context, we see no reason to deviate from our current approach. We remain focused on income-generating real assets tied to the RBA cash rate, which continue to do exactly what they are designed to do in this environment.
For ongoing market insights and portfolio commentary, visit the Barker Wealth market updates page.
Disclaimer: This commentary is intended for general information only and does not constitute personal financial advice. You should consider your own objectives, financial situation and needs before making any investment decisions. Barker Financial Pty Ltd ABN 62 675 838 605, trading as Barker Wealth, is a Corporate Authorised Representative (CAR) 1317193 of AFSL Holdings Australia Pty Ltd ABN 75 165 392 889, AFSL 460940.