If you’ve been half-following the news over the past few months, you’d think markets would be having a rough time of it. Conflict overseas, oil price jitters, inflation headlines, questions about interest rates — plenty to unsettle anyone glancing at the news.
But SURPRISE! The markets had a pretty strong quarter.
As tensions eased and oil prices came back down, investors turned their attention back to what actually drives long-term returns. Company profits, economic growth, and the huge wave of investment going into artificial intelligence. Share markets bounced back strongly, and once again proved that they can turn around a lot faster than the headlines do.
This is a pretty normal pattern. Uncertainty shows up, markets wobble, and then they often recover well before the news gets any better.
The AI story keeps running
You’ve probably heard plenty about AI by now, but here’s why it actually matters for your investments. Tech companies are spending enormous amounts on data centres, computing power and infrastructure to build AI systems. That spending doesn’t just line the pockets of a few big US names — it flows through to companies right across Asia that make the chips and hardware behind it all.
That’s a big part of why tech and AI-related shares had such a strong quarter.
Asia had a good run too
While the AI headlines mostly focus on the US, some of the strongest returns this quarter actually came from emerging markets — particularly Taiwan and South Korea, both key players in the global tech supply chain.
It’s a good reminder that “emerging markets” can also mean direct exposure to some of the biggest themes shaping the world right now.
Bonds had a quieter few months
Shares had the spotlight, while bonds were more subdued. Investors spent the quarter weighing up falling oil prices (which eased inflation worries) against a still-resilient economy (which meant less pressure on central banks to cut rates fast). That tug-of-war meant expectations for future interest rates kept shifting — and bond markets moved around as a result.
Quick explainer on how this works: Bond prices and interest rates usually move in opposite directions. When investors expect rates to stay higher for longer, bond prices tend to come under pressure. When expectations shift toward lower rates, bond prices tend to benefit.
Closer to home, what happened in New Zealand?
The RBNZ held the Official Cash Rate at 2.25% at its May meeting, citing oil prices and global uncertainty as reasons to keep an eye on inflation. By the end of June though, things had settled — oil prices eased and global tensions cooled off.
Why does this matter to you? The OCR feeds through to mortgage rates, term deposit rates, business lending costs, and general household spending. So shifts in interest rate expectations don’t just move markets — they show up in household budgets too.
A few things to keep in mind:
- Don’t let the noise drive the decision. People who sold out during the volatile patches may have missed some of the strongest days of the recovery that followed.
- Diversification still matters, so spread it around. Tech and AI were the standout performers this quarter, but market leadership can shift quickly. Spreading investments across different regions and asset classes helps reduce reliance on any one theme.
- Bonds still earn their keep. They didn’t shine this quarter, but they continue to help manage risk and add balance to a portfolio.
Looking to the rest of 2026
- Inflation. Will it keep easing as energy costs settle down?
- Company earnings. Can the growth (especially in tech and AI) keep up?
- Interest rates. Central banks are still balancing inflation against growth, and future decisions will keep influencing markets.
As always, we are here if you have any questions
Uncertainty and opportunity tend to show up together — this quarter was proof of that. Markets delivered strong returns, and there’ll likely be more bumps ahead.
Our advice stays the same. Keep your portfolio diversified, keep your eyes on your own goals and timeframe, and don’t let a headline talk you out of a good long-term plan.
If you’d like to chat through what any of this means for your own situation, get in touch — that’s what we’re here for.
