Market update: Mixed Signals Across Markets as Rate Cut Hopes Stall

Weekly Market Update - US, NZ & Australia

It was a relatively calm week on the surface, but underneath, markets are still juggling inflation expectations, interest rate timing, and mixed economic data. While headline moves were modest, there’s plenty going on that matters for KiwiSaver over the medium to long term.

United States

US markets were slightly higher overall, with tech and growth stocks doing most of the heavy lifting once again. Investors continue to price in the idea that interest rates are near their peak, even though the timing of any cuts remains uncertain.

Economic data out of the US was mixed:

• Inflation is trending in the right direction, but not fast enough to give the Federal Reserve full confidence.

• The labour market remains resilient, which is good for the economy but keeps pressure on rates.

• Big tech earnings continue to play an outsized role in overall market performance.

The takeaway: optimism is there, but it’s fragile, and markets are reacting quickly to any new data.

New Zealand

The NZ market had a quieter week, continuing the theme we’ve seen for much of the past year. Higher interest rates are still weighing on consumer-facing companies, while exporters and dividend-paying stocks have been more stable.

Key themes locally:

• Interest rates remain restrictive, which slows spending and growth.

• Company earnings are under pressure from higher costs.

• The NZ market is still more value-focused compared to the growth-heavy US market.

While not flashy, NZ shares continue to play an important diversification role inside KiwiSaver portfolios.

Australia

Australian markets edged higher, supported by resources and financials. Commodity prices and demand from China remain key drivers, particularly for mining stocks.

What stood out:

• Banks benefited from stable margins, though growth expectations remain modest.

• Resource stocks remain sensitive to global growth signals.

• Inflation in Australia is easing slowly, keeping rate-cut expectations cautious.

Australia continues to sit somewhere between the US growth story and NZ’s more defensive positioning.

KiwiSaver Insight

For KiwiSaver investors, weeks like this are a good reminder that markets don’t move in straight lines. Even when headline returns look calm, different regions and sectors can behave very differently beneath the surface.

Growth-heavy funds tend to be more influenced by US markets and tech performance, while balanced and conservative funds are more affected by interest rates and defensive assets. Short-term ups and downs are normal, and KiwiSaver outcomes are usually shaped far more by time in the market and contribution consistency than by any single week’s performance.

Looking Ahead

Markets will remain highly sensitive to:

• Inflation data

• Central bank commentary

• Corporate earnings updates

Expect ongoing volatility, even if the broader trend feels relatively steady.

Disclaimer

This update is for general information only and does not take into account your individual financial situation or goals. Past performance is not a reliable indicator of future returns.