Market update: 6 May 2025
The ASX 200 ended the week up 3.4%, with all eleven major sectors finishing in the green for a second consecutive week. Locally, investor sentiment was boosted by the re-election of Prime Minister Anthony Albanese and the Labor Party, marking the first time in decades a sitting PM has won a second term. The strong performance in equities was further supported by March quarter inflation data, which showed both headline (2.4% YoY) and underlying inflation (2.9% YoY) remaining within the RBA’s target range—strengthening expectations for a rate cut later this month. Technology stocks led the charge, particularly Wisetech, which surged after confirming it’s in talks to acquire US supply chain provider e2open.
Global markets also saw gains this week as trade tensions appeared to ease and earnings season ramped up. In the US, the S&P 500, Nasdaq and Dow Jones all logged a second straight week of growth, rising 2.9%, 3.4%, and 3.0% respectively. The S&P 500 notched its longest winning streak in two decades, with nine consecutive positive sessions. A strong start to earnings season helped boost sentiment, with a majority of companies beating expectations on both earnings and revenue. Meanwhile, Q1 GDP data showed a slight contraction of 0.3% QoQ, largely attributed to a tariff-driven surge in imports. Still, April’s jobs data held up, with nonfarm payrolls increasing by 177,000 and unemployment steady at 4.2%.
European equities also finished higher this week, supported by improving growth and stable inflation. The Eurozone posted a 0.4% GDP increase in Q1, while inflation held at 2.2%. Markets were encouraged by signs that the worst of tariff uncertainty may be easing, with sentiment stabilising across the region. In Asia, Greater China had a mixed week, with the Hang Seng up 2.4% and the Shanghai Composite slipping slightly. Japan’s Nikkei rose 3.2% despite the Bank of Japan holding rates and downgrading its growth and inflation outlooks.
Overall, markets continue to find support in stabilising macro data and resilient corporate earnings, but caution remains amid ongoing trade discussions and geopolitical developments. For Australian investors, the recent strength in domestic equities and a contained inflation print are reassuring signs as we move further into Q2.
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