Snapshot
Global markets delivered another month of gains in June, as investor sentiment remained resilient in the face of ongoing geopolitical tensions and uncertainty around trade policy. Equity indices across major regions rose or held firm, supported by expectations for interest rate cuts and continued momentum in key areas of the global economy.
In the US, equity markets advanced strongly throughout the month. The S&P 500 rose 5.09% and the Nasdaq Composite gained 6.57%. Confidence was supported by signs of progress in trade negotiations, easing tensions in the Middle East, and a growing belief that the Federal Reserve may begin cutting interest rates as early as July. While economic data was mixed, markets responded positively to softer indicators that reinforced the case for monetary easing. The Federal Reserve left the official cash rate unchanged in June, though commentary from policymakers signalled a more balanced tone, with some members leaning towards imminent cuts. At the same time, market pricing shifted to reflect expectations for further easing later in the year.
Geopolitical developments featured prominently, with tensions escalating early in the month as conflict between Israel and Iran prompted retaliatory military strikes, including a targeted US response. Oil prices initially spiked on concerns around potential supply disruption, particularly through the Strait of Hormuz, before easing sharply in the second half of the month following confirmation of a ceasefire. The oil price ended June higher but well below its peak levels, reflecting the market's relief around de-escalation and improving risk sentiment.
Trade policy remained a central theme, particularly as the US approached the end of its 90-day pause on reciprocal tariffs. While no formal deals were signed, dialogue with China progressed materially, with both sides codifying prior agreements and engaging on sensitive issues such as rare earths and autos. Negotiations with other key partners, including the European Union and Canada, were ongoing, and although the 9 July deadline remained in focus, US officials signalled flexibility. The evolving trade narrative helped underpin global market confidence, despite lingering uncertainty over final outcomes.
European markets were more muted, with the STOXX 600 easing 1.20% following a particularly strong May. Uncertainty around trade outcomes, concerns over inflation persistence, and ongoing political developments weighed modestly on performance. However, the broader tone remained constructive, underpinned by improving fund flows and continued policy support. The European Central Bank delivered another rate cut during the month, but signalled it may be nearing the end of its current easing cycle as inflation indicators stabilise. Fiscal policy also remained in focus, with governments reassessing spending priorities and economic support measures.
In Australia, the ASX 200 rose 1.41% in June, marking a third straight monthly gain. The index briefly touched a record high mid-month before trading more cautiously into month-end. Performance was driven by ongoing expectations for rate cuts and supportive global trends, though momentum slowed in the latter part of the month in the absence of major domestic catalysts.
The Reserve Bank of Australia did not meet in June, with the next decision due in early July. Markets continued to price in a high likelihood of further easing, following May’s rate cut and a series of weaker domestic data points. Employment softened in May, GDP growth remained subdued, and policymakers acknowledged growing downside risks to the outlook, including from international trade dynamics.
Overall, June was marked by a combination of cautious optimism and macroeconomic cross-currents. While headline risks around geopolitics and trade policy remain, financial markets appeared to look through the noise, focusing instead on the potential for policy support and a stabilising global economic backdrop.
Key Stocks
Wade is the head of the Investment Services division at Cutcher & Neale and has over 10 years of industry experience in accounting and investment advisory roles.
Ryan is our Portfolio Manager, bringing over 15 years of experience in managing multi-asset investment portfolios with a specialisation in fundamental equity analysis.
