Global Markets Overview
US equity markets stumbled through a volatile week following February’s jobs report, which revealed a contraction of 92,000 nonfarm payroll positions the worst in four months and well below expectations of 59,000 new jobs. A combination of healthcare strikes, federal government cutbacks, and manufacturing weakness sent the S&P 500 and Nasdaq lower, while the Dow closed Friday below 48,000 amid renewed stagflation fears.
The Federal Reserve now faces a policy dilemma, balancing domestic weakness against rising inflation from geopolitical events. Escalating Middle East tensions, including US and Israeli strikes on Iran and retaliatory attacks on Gulf infrastructure, pushed oil prices higher on fears of shipping disruptions in the Strait of Hormuz. Treasury yields rose despite disappointing employment data, with the 10-year yield climbing as markets priced in persistent inflation, delaying anticipated rate cuts to October or beyond.
The ASX: A Rough Week for Australian Equities
Australian equities faced their worst week since the Liberation Day tariff shock in April 2025, with the ASX 200 falling roughly 3% to close at 8,851. Materials bore the brunt, with the XMJ plunging 7.84% for the week and 4.09% on Friday alone amid weakness in iron ore, copper, and gold.
Financials also fell over 3%, although CBA received a Fitch credit upgrade to AA. Consumer discretionary and industrials retreated sharply, with higher jet fuel costs and Middle East flight disruptions hitting Qantas and Virgin Australia.
RBA Governor Bullock rattled markets with a hawkish speech at the AFR Business Summit, calling the March meeting “live” and highlighting upgraded Q4 GDP forecasts of 0.7% quarterly and 2.3% annually the strongest growth since Q1 2023. Implied odds of a March rate hike rose to 33%. The Australian dollar hovered around 0.6731 as traders balanced the prospect of tighter policy against a darkening global backdrop. Brent crude traded in the low-to-mid $80s on Middle East supply concerns, while gold pulled back roughly 5% from its $5,124 peak after US and Israeli strikes on Iran, and iron ore lingered near $105 per tonne amid uncertainty over Chinese demand.
A Message from Our Director
It’s been a challenging week in markets, with tensions between the US and Iran pushing oil prices to levels not seen in quite some time. When oil hits $100 a barrel, it affects everything from petrol prices to business costs here at home.
With inflation already stubborn and government spending remaining high, elevated oil prices could put further pressure on company earnings and share prices. There is also the risk that the RBA may need to implement further rate hikes though higher rates won’t solve an oil supply shock.
This is why Barker Wealth has been positioning clients more defensively in recent months, shifting toward income-generating investments less dependent on equity market performance. Until economic conditions clarify, a measured and thoughtful approach remains prudent. We will continue to monitor developments closely and keep our clients updated as the situation evolves.
Stay Informed
For ongoing market insights, visit Barker Wealth’s market updates page: https://barkerwealth.com.au/market-update/