The June quarter of 2025 was a tale of two halves. After a sharp drop in early April triggered by surprise US tariff announcements, global markets staged a strong recovery, finishing the quarter in positive territory. But while most major markets moved higher, New Zealand’s performance lagged - reflecting the uncertainty still weighing on local and global economies.
A Rocky Start Turns Around
After a rocky start to the quarter, things turned around with a strong rise in asset values across nearly all major investment types. At the beginning of April, just two days into the new quarter, the US President surprised many – possibly even himself – by announcing large and aggressive tariffs, especially targeting China. This caused global share markets to drop sharply, with US shares (S&P 500) falling 12% in just a few days – something we hadn’t seen since the Covid outbreak.
Tariffs, Market Reactions, and Political Uncertainty
When the US bond market began showing signs of stress, the President started to soften his stance on tariffs. For the rest of the quarter, there were mixed messages and shifting deadlines. Despite this, markets recovered quickly. Now it seems markets are ignoring political talk and only reacting to real policy changes, which is likely a positive shift.
Slowing Economic Growth Expectations
At the same time, economists have been lowering their expectations for future economic growth, particularly in the US. Many believe that tariffs – or even just the uncertainty around changing policies – will likely hurt the economy. Businesses are holding off on spending and investment while they wait for more clarity.
Central Bank Responses
In response, some central banks have cut interest rates again, although many were planning to do so anyway, as inflation has moved closer to their targets. New Zealand, Europe, the UK, and Australia have all lowered rates. The US and Canada have kept rates steady for now but are expected to lower them soon. Central banks are highlighting the high level of uncertainty, with some now publishing different possible outcomes rather than fixed forecasts.
Market Performance for the Quarter
Overall, global share markets rose 4% during the quarter. Europe, the UK, and New Zealand lagged behind a bit, but Germany stood out thanks to changes in its debt rules. Long-term interest rates jumped around in April but finished the quarter only slightly higher than they started.
What to Watch in the Months Ahead
Important things to watch in the coming months include:
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US tariff decisions (again)
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Whether the US central bank cuts interest rates
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How markets react to the large – and likely unsustainable – spending in the US budget
Next Steps
If you’re making investment decisions without a clear long‑term plan, talk to Lighthouse wealth for independent, research‑backed advice tailored to your goals.
For a no obligation discussion to see how we can help you on the path to wealth, please contact us.
Disclaimer:
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