Brent crude just posted its worst month since the early days of COVID-19, a US-Iran ceasefire is taking shape, and the ASX closed above 8,700. Here is what drove markets last week and what investors should be watching next.
Global Markets
Global equity markets closed the week in modest positive territory, but the dominant story was not found on any stock exchange. It was in the oil market. Brent crude finished May at around $92 a barrel, down nearly 20% from its 2026 peaks and on track for its worst monthly performance since the early days of COVID-19.
The catalyst was incremental progress on a US-Iran ceasefire, with reports of a 60-day memorandum of understanding temporarily suspending hostilities and reopening questions about access through the Strait of Hormuz. For energy markets, that is a meaningful development. For Australian households watching fuel prices and the RBA, it matters just as much.
In the US, the S&P 500 and Nasdaq each gained 0.2% for the week, with the Dow adding 0.7%. Weekly moves were modest, but May’s monthly scorecard told a stronger story, with the Nasdaq up more than 8% and the S&P 500 gaining 5%.
Hong Kong underperformed, with the Hang Seng weighed down by caution around financial and technology names as investors awaited clarity on the ceasefire terms. The divergence between a resilient US market and a more hesitant Asia is a reminder that geopolitical risk premiums do not unwind overnight.
Australian Markets and ASX 200
The ASX 200 closed at 8,732, up 0.86% for the week. Australia’s sharemarket ended a volatile period on a firm note, recovering Friday’s 1.6% gain after a sharp 1.4% sell-off on Thursday. The rebound was broad-based, with materials, consumer discretionary stocks, and financials among the leaders.
Northern Star Resources and Evolution Mining each gained 4.9% on Friday as gold benefited from safe-haven demand and a softer US dollar. BHP added 2.9%. Consumer cyclicals advanced more than 4% across the week, real estate stocks recovered 2.4%, and industrials gained 1.5%.
Weighing on sentiment mid-week was April’s monthly CPI, which confirmed headline inflation of 4.2% annually, down from 4.6% in March. However, trimmed mean inflation edged higher to 3.4%, which is the number the RBA watches most closely. Household spending fell in April for the first time in four months, and unemployment surprised to the upside. Taken together, these datapoints complicate the RBA’s path ahead considerably.
The June meeting on 5 June is widely expected to be a pause. The August meeting is increasingly described as live.
A Message From Our Founder
The oil market told the most important story of May, and it was not the one most investors were expecting at the start of the year. Brent crude has fallen roughly 20% from its 2026 highs in a single month, reversing a significant portion of the energy-driven inflation shock that had been building since the Middle East conflict escalated in February. For Australian investors, this matters well beyond the petrol bowser. Lower energy costs feed directly into the inflation print the RBA watches most carefully.
The RBA has now hiked three times consecutively, bringing the cash rate to 4.35% and fully unwinding last year’s easing cycle. Yet the domestic data is pointing in the opposite direction. Household spending is softening, unemployment has ticked up, and the economy is running well below trend growth. If oil prices hold at these levels, or continue to fall, the inflation trajectory shifts meaningfully.
The August meeting was already being flagged as a potential site for the next move. It may instead become the meeting at which the RBA pauses and reassesses. These are conditions worth watching closely, and exactly the kind of moments where staying close to your adviser makes a real difference. If you have questions about how the current rate environment or oil price shift may affect your financial position, we are here to help.
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.