We would like to provide you with an update on recent market developments that may have an impact on your investments.
Market Update as of April 2026
Introduction
Financial markets in early 2026 continue to be shaped by a combination of rising inflation, higher interest rates and ongoing geopolitical uncertainty. The recent escalation of conflict in the Middle East has had a direct impact on global energy markets, pushing oil prices higher and contributing to renewed inflationary pressure across both Australian and global economies.
This update outlines the key developments across markets and what they may mean for your investment strategy.
Market Snapshot — As at 23 April 2026
• S&P/ASX 200: 8,770 (▼ 4.7% from February peak)
• S&P 500 (US): 7,138 (▲ Record high)
• RBA Cash Rate: 4.10% (77% probability of May rate hike)
• US Fed Rate: 3.50–3.75% (unchanged)
• Brent Crude: US$101.91 (back above US$100)
• Inflation (CPI): 3.7% annually (Trimmed mean 3.3%)
• Gold: US$4,752 (▲ 43% year-on-year)
• AUD/USD: 0.7155 (four-year high)
Interest Rates and Economic Conditions
The Reserve Bank of Australia has maintained the cash rate at 4.10% following consecutive increases earlier in the year, as inflation remains above the 2–3% target range. Annual CPI is currently 3.7%, with underlying inflation at 3.3%, and markets are pricing a 77% probability of a further rate increase in May.
The impact of higher interest rates is now being felt more broadly across the economy. Consumer sentiment fell by 12.5% in April which is the largest decline since the onset of COVID. While mortgage stress is expected to rise from 24.9% to above 28% as households adjust to higher borrowing costs.
Despite this, the labour market remains relatively resilient, with unemployment at 4.3% and participation rates near record highs. However, wage growth of 3.4% continues to lag inflation, placing ongoing pressure on household budgets.
Key Market Themes
Oil prices and geopolitical risk
Ongoing tensions in the Middle East continue to drive volatility in oil markets. Brent crude has risen above US$100 per barrel, following a peak of US$119 in March, with disruptions in the Strait of Hormuz impacting global supply. This has flowed through to higher petrol prices locally, which peaked at approximately $2.38 per litre before easing slightly following government intervention.
Cost-of-living pressures
Higher mortgage repayments, elevated fuel costs and rising household expenses are placing increasing pressure on consumers. This has contributed to a sharp decline in confidence and reduced discretionary spending, particularly impacting retail, travel and hospitality sectors.
Divergence across markets
The Australian share market remains relatively stable but uneven. The S&P/ASX 200 is sitting at approximately 8,770, with strong performance from energy producers and gold miners, while banks, retailers and listed property trusts have lagged.
Globally, US markets continue to perform strongly, with the S&P 500 reaching a record high of 7,138. This has been supported by strong corporate earnings and continued investment in artificial intelligence, with over US$700 billion expected to be invested in AI infrastructure in 2026.
Currency and Global Markets
The Australian dollar has strengthened to around 0.7155 against the US dollar, supported by higher domestic interest rates and strong commodity demand. While this helps reduce the cost of imports, it can reduce the value of international investment returns when converted back into Australian dollars.
Global central banks remain cautious, with the US Federal Reserve holding rates at 3.50–3.75% and signalling uncertainty around future rate cuts, as inflation remains elevated and influenced by energy prices.
Key Global Themes Impacting Markets
1. Oil Shock & Geopolitical Risk
– Oil surged from ~$61 to $119 per barrel, before stabilising around $90–$95
– Driven by Middle East conflict and supply disruptions
Impact:
– Higher inflation
– Pressure on interest rates
– Strong performance in energy assets
2. Interest Rates & Cost of Living
– Mortgage stress is rising sharply
– Consumer spending is weakening
Impact:
– Slower economic growth
– Pressure on property and discretionary sectors
3. Artificial Intelligence Investment Boom
– Over $700B expected in AI spending in 2026
Impact:
– Strong returns in tech leaders
– Increased market concentration risk
Property Market Update
The Australian property market continues to show mixed performance across regions. National dwelling values increased by 0.7% in March and 9.9% over the year, however results vary significantly by location.
Australian Property Market Performance (State Overview)
| State / Territory | Capital City | Recent Performance | Market Trend | Key Drivers |
|---|---|---|---|---|
| Western Australia | Perth | +24.3% | Strong Growth | Population inflows, tight housing supply |
| Northern Territory | Darwin | +19.7% | Strong Growth | Affordable housing, rental demand |
| Queensland | Brisbane | +19.0% | Strong Growth | Interstate migration, supply constraints |
| South Australia | Adelaide | Moderate Growth | Stable | Affordability, steady demand |
| Tasmania | Hobart | Flat / Modest | Stabilising | Slower migration, affordability pressures |
| New South Wales | Sydney | −0.2% (quarter) | Softening | Higher interest rates, borrowing constraints |
| Victoria | Melbourne | −0.6% (quarter) | Softening | Reduced borrowing capacity, sentiment |
| ACT | Canberra | Flat / Slight Decline | Stable to Soft | Public sector driven demand, rate sensitivity |
Regional markets continue to outperform, rising 3.3% for the quarter and 11.7% annually, with low rental vacancy rates of around 1.0% supporting yields.
Key Drivers:
1. Interest Rates
– Higher borrowing costs are:
– Reducing borrowing capacity
– Slowing price growth in some areas
Particularly impacting:
– First-home buyers
– Highly leveraged investors
2. Mortgage Stress
Mortgage stress expected to rise above 28% of households
Implications:
-Reduced discretionary spending
– Potential increase in forced sales (at the margins)
3. Supply Constraints
– Limited housing supply continues to support prices
– Construction costs remain elevated
This creates:
– A floor under property value
– Continued demand in quality suburbs
4. Segmentation Matters
Not all property markets are equal:
Stronger segments:
– Blue-chip suburbs
– Limited supply areas
– High-income buyer regions
Weaker segments:
– Outer suburbs with oversupply
– Investor-heavy areas
– Interest rate-sensitive markets
What This Means for Investors
The current environment highlights that markets are becoming increasingly sensitive to changes in inflation and interest rate expectations. Not all sectors are moving in the same direction, with energy, commodities and select technology sectors outperforming, while interest rate-sensitive areas remain under pressure.
Geopolitical developments, particularly in energy markets, are likely to continue driving short-term volatility.
In this environment, maintaining a well-diversified portfolio across asset classes, sectors and geographies remains critical. A disciplined, long-term investment approach continues to be the most effective way to navigate uncertainty and achieve consistent outcomes.
Looking Ahead
The outlook for the remainder of 2026 will largely depend on inflation trends, particularly energy prices, and how central banks respond.
While short-term market movements may remain volatile, staying focused on long-term investment objectives and maintaining a structured strategy will remain key to achieving successful outcomes.
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