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Chapter 1: What factors contributed to the recent drop in oil prices?
A landmark preliminary peace deal sent oil prices sliding. A new Fed chair made his mark and the RBA held firm. Here's what you need to know. I'm Jacqui Newman, Head of Capital Markets at Sharesies. Let's get into it. US markets pushed higher last week. The S&P 500 gained 0.9% and the Nasdaq climbed 2.4%. The S&P 500 is now up 11 of the past 12 weeks.
Closer to home, the ASX 200 edged up 0.3% for the week, and the NZX 50 gained 0.8%. On the US sector front, technology was the standout, up over 3%, driven by a big week for semiconductors, up 7.3%, and memory stocks surging 18%.
Chapter 2: How did the new Fed Chair's meeting impact market expectations?
Energy was the clear underperformer, down 6.6% as progress on a US-Iran peace deal weighed on oil prices. The preliminary deal covers a framework for the reopening of the Strait of Hormuz, oil sanction waivers, and a pathway for nuclear negotiations. It also contemplates a 60-day window to finalise a permanent agreement.
Brent crude oil fell almost 10% on the week and is down around 25% over the past month. The Middle East situation is far from settled though.
Chapter 3: What are the implications of the RBA's decision to hold interest rates?
Over the weekend, US Vice President J.D. Vance travelled to Switzerland to begin technical talks, and a fresh Lebanon ceasefire was already under pressure. The situation remains fluid. In economic news, the Fed held rates as expected, but the tone caught markets off guard. In Kevin Walsh's first meeting as chair, forward guidance was stripped out and the message was clear.
Price stability is the priority. Walsh abstained from submitting a dot plot, but the remaining members told the real story. Nine of the 18 Fed members are now penciling in at least one rate hike for 2026. On the back of the meeting, markets repriced fast, with rate hike expectations for year end nearly doubling to 36 basis points. The US dollar hit 12-month highs as a result.
Chapter 4: What key economic indicators should investors watch this week?
Closer to home, the RBA held the cash rate at 4.35%, the first pause after three consecutive rate hikes this year. RBA Governor Bullock was unambiguous in her message. Inflation remains too high, the labour market is still tight and the board will raise rates further if required. Looking ahead, the key release this week is US Core PCE for May, which will be released on Thursday.
This is the Fed's preferred inflation gauge.
Chapter 5: How do current market movements affect investment strategies?
With markets now pricing in hikes rather than cuts, this print carries real weight. Plenty moving, stay across it and happy investing.