Market update: 17 March 2026
Australian shares fell 2.6% this week as a sharp rise in oil prices renewed concerns about stagflation and pushed markets to price a higher likelihood of an interest rate hike. Energy stocks outperformed as higher oil prices supported the sector, while information technology, healthcare, real estate investment trusts and materials lagged. The Australian dollar remained resilient against a stronger US dollar, supported by expectations of tighter monetary policy and favourable terms of trade. The Reserve Bank of Australia will hold its policy meeting today, with markets closely watching for the interest rate decision amid rising expectations of further tightening.
US equities also declined, with the S&P 500 down 1.6%, the Dow Jones falling 2.0% and the Nasdaq dropping 1.3%. Escalating geopolitical tensions and oil prices moving above US$100 created a risk-off environment, pushing investors toward safer assets such as government bonds, gold and defensive sectors. Front-end yields rose sharply as markets reassessed the expected path for US interest rates. While core inflation showed signs of easing, rising energy prices linked to the Iran conflict added pressure for households. Private credit markets also faced scrutiny as redemption pressure at several large investment vehicles prompted investor caution.
European equities slipped, with the STOXX 600 down 0.5%. Investors focused on the potential duration of the conflict, rising energy costs and the potential impact on regional growth. European Central Bank President Christine Lagarde noted that policymakers remain ready to respond to higher energy-driven inflation, while acknowledging that uncertainty and market volatility remain elevated.
Japanese equities declined 3.2%, as oil volatility and a weaker yen increased concerns around imported inflation. Japan’s heavy reliance on imported energy leaves the economy particularly sensitive to oil price movements. Prime Minister Takaichi announced the release of strategic reserves and additional gasoline subsidies to help stabilise domestic fuel prices. Government bond yields rose toward one-month highs, while the yen weakened toward levels that have previously prompted currency intervention.
Chinese equities also weakened, with the Shanghai Composite down 0.7% and the Hang Seng falling 1.1%. Stronger inflation data, combined with mixed policy signals and fading momentum in AI-related themes, weighed on sentiment. Consumer prices rose 1.3% year on year, the fastest pace in more than three years, partly driven by Lunar New Year services demand. Producer prices remained in deflation but showed improvement compared with the lows seen in 2024.
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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.
