Global Markets
The S&P 500 gained 2.3% for the week to close at a record 7,398, the Nasdaq surged 4.5% to 26,247, and both indexes notched their sixth consecutive weekly gain, the longest winning streak since 2024, with the Dow adding a more modest 0.2%. The week’s defining session was Wednesday, when the S&P 500 advanced 1.46% to close at a fresh all-time high and the Dow jumped 612 points, after Axios reported that the United States and Iran were close to a deal that would include a moratorium on nuclear enrichment, sending oil prices plunging nearly 9%.
That optimism was tempered on Thursday, when Iran stated the United States had violated the ceasefire by striking Qeshm Port. The S&P 500 pulled back 0.4% and every major sector finished in the red, led by Energy down 1.95% and Industrials down 1.66%.
April nonfarm payrolls came in at 115,000, well above the 55,000 expected by economists, and unemployment held at 4.3%. The data helped lift stocks to fresh records on Friday to close out the week. Beneath the headline equity strength, more than half of the S&P 500’s weekly gains came from just five stocks: Alphabet, Broadcom, Amazon, Nvidia, and Apple, highlighting a continued narrowness in market leadership that some analysts are comparing to the late 1990s technology boom. JPMorgan warned clients that the supply buffers insulating oil markets from the conflict are eroding and that demand destruction is increasingly likely if energy prices persist, with the University of Michigan Consumer Sentiment Survey falling to a new low of 48.2 in early May.
Australian Markets and ASX 200
The ASX 200 closed the week at 8,744, ending a three-week losing streak with a 0.91% weekly gain. Only four of eleven sectors finished in positive territory, with mining shares leading the recovery as iron ore, copper, gold, and lithium all pushed to multi-year highs simultaneously.
The dominant domestic event was Tuesday’s Reserve Bank of Australia decision. The board voted 8 to 1 to raise the cash rate by 25 basis points to 4.35%, its third consecutive increase this year, fully unwinding last year’s 75 basis points of rate cuts and returning the cash rate to its 2024 peak. The board’s language was notably firmer than in March, explicitly flagging that firms are already passing on higher costs, that short-term inflation expectations have risen, and that the Middle East shock is now being treated as a clear near-term inflationary impulse.
The RBA lifted its headline inflation forecast for June 2026 to 4.8% and its trimmed mean forecast to 3.8%, while revising GDP growth lower across the forecast horizon, reflecting the combined drag of higher oil prices and rising interest rates. The RBA’s own baseline assumption is that the Iran conflict resolves in the near term and fuel prices subsequently decline.
The major banks bore the brunt of the rate decision, with Westpac sliding 4.8% after going ex-dividend, NAB shedding 2.9%, and CBA giving up 1.9%. Meanwhile, BHP closed at a 10-week high of $58.71, narrowing its market capitalisation gap with CBA to just $2.6 billion, a signal of how seriously institutional investors are taking the commodity strength story. Any implied probabilities reflected in market pricing are not a reliable indicator of actual outcomes, and interest rate decisions involve a high degree of uncertainty.
A Message From Our Founder
This week brings something beyond the usual market noise, with the Australian Federal Budget due for release and significant speculation around whether the capital gains tax discount on assets including shares and managed funds could be scrapped entirely. It is a reminder that wealth management is not just about picking the right investments. It is about understanding the rules of the game and adapting your strategy as those rules change.
That is something we think about constantly. The tax environment, the superannuation framework, and the treatment of different asset classes are not static backdrops. They shift, sometimes gradually and sometimes quite suddenly, and a strategy that made perfect sense three years ago may need to be reconsidered today. We saw that with Division 296. We may see it again this week with capital gains tax. The investors who tend to come out ahead are not the ones who bend the rules. They are the ones who understand them deeply enough to stay one step ahead of the changes.
For some investors, a meaningful shift in capital gains tax treatment may be worth discussing with their adviser, particularly where the balance between property and more liquid investments is relevant to their personal circumstances. These are exactly the conversations we are here to have. If you have questions about how any Budget announcements might affect your personal financial position, please do not hesitate to reach out this week.
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.