Market update: 12 May 2026
Australian shares edged modestly higher this week, with the ASX 200 up 0.2%. On 5 May, the RBA increased the official cash rate by 25 basis points to 4.35%, marking its third consecutive rate hike this year. The central bank pointed to ongoing inflation pressures, partly driven by higher global energy prices, and reinforced the need to slow demand in the economy.
Investor attention is also turning to the Federal Budget, which will be released tonight, with expectations centred around cost-of-living tax relief. Stay tuned for more from the Raiz team tomorrow as we break down the key announcements and what they could mean for Australians and investors.
US markets reached fresh record highs, with the S&P 500 rising 2.3%, the Dow adding 0.2% and the Nasdaq surging 4.5%. Strong labour market conditions and optimism around easing tensions in the Middle East helped support sentiment. Earnings season also remained exceptionally strong, with first quarter earnings growth tracking well above expectations. Capital markets activity was particularly active, with the busiest week for equity issuance since late 2025. Despite the strong market performance, consumer sentiment fell to a record low as higher fuel costs and persistent inflation continued to weigh on households.
European equities finished broadly flat, with the Euro Stoxx 600 edging up 0.1%. Positive corporate earnings helped support markets, though gains were limited by ongoing geopolitical uncertainty. The European Central Bank kept interest rates unchanged while acknowledging that economic risks have intensified.
Japanese equities performed strongly this week, with the Nikkei rising 5.4% despite continued currency volatility. The Bank of Japan left interest rates unchanged but raised its inflation forecasts in response to persistent supply-driven price pressures. Markets also continued to monitor movements in the yen closely. Chinese markets remained resilient, with the Shanghai Composite up 1.6% and the Hang Seng gaining 2.4%. Economic data remained supportive, particularly across manufacturing and electronics, with industrial profits rising strongly in March.
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Important Information
This blog has been issued by Instreet Investment Limited (ACN 128 813 016 AFSL 434776) as Responsible Entity of the Raiz Invest Australia Fund (ARSN 607 533 022) and has been prepared without taking into account your objectives, financial situation or needs. Before acting on such information, you should conduct your own review or consult a financial advisor before making a decision to invest. Please read the relevant Product Disclosure Statement and any associated reference documents before making an investment decision. In accordance with the Design and Distributions Obligations, we maintain Target Market Determinations for our Funds. All documents can be found on the Raiz website www.raizinvest.com.au, or calling the Customer Support team on 1300 754 748. Please note that past performance is not a reliable indicator or guarantee of future performance. Historical returns, forecasts, and market commentary are provided for general informational purposes only. All investment carries risk and may result in loss of capital.
