Quarterly Market Update | 30 June 2025

The never-ending back and forth on tariffs, an escalating war in Ukraine and the Middle East, and growing concern about the US’s mounting debt should indicate financial markets are experiencing a fair amount of turbulence, and yet Australian and global stocks appear to be largely unconcerned by the danger signs. By the end of the quarter equity markets were surging and reaching new highs. Investors have benefited from a disciplined focus, rather than reacting to news cycles.

Global shares suffered a significant downturn at the start of April, falling as much as 10% in some markets, when the new US Administration announced larger than expected tariffs on friends and foes alike. However, the tariffs were paused for 90 days only a week later as rising US government bond yields forced the President to hold off the immediate implementation of tariffs.

Since that time there has been much uncertainty around trade, but markets have largely ignored the potential inflationary impact of tariffs. While investors remain in a wait and see mode as the 90-day pause comes to an end, global markets appear less concerned than they were 3 months earlier. The US economy is proving more resilient than many feared, giving the market confidence it can cope with the impact of tariffs.

Despite the fall in the market early in April global markets have recovered from the initial announcement of tariffs to record a strong quarter and financial year return. Developed markets, of which the US is around 70% by market cap, have returned nearly 20% for the previous 12 months, while the Emerging Markets – after years or relative underperformance - have also seen strong returns over the quarter and financial year.