Market Update June 2025: After the Shock
Markets have absorbed April’s shock, but the underlying signals remain inconclusive.
Two months after the volatility sparked by April’s “Liberation Day” tariff announcements, global equity markets have returned to earlier highs. In this update, MGD Wealth Director and Investment Committee Chair Stephen Furness and WTW Head of Investment Strategy (Australia) Jack Sutherland unpack the policy shifts, economic signals, and evolving positioning that continue to shape the investment landscape.
Key Takeaways
Tariff concerns soften: Markets have recalibrated as expectations around the scale of US tariffs have moderated.
Australia begins easing cycle: A 25 basis point cut marks the start of the RBA’s rate-cutting program, with further easing expected.
Strategic caution continues: Uncertainty in sentiment and policy keeps diversified portfolio construction front of mind.
A Reset After April
The initial shock of the April policy announcements has faded, with markets largely retracing their steps to January 2025 highs. Tariff measures, which were more severe than anticipated at the time, have since been moderated through delays and ongoing negotiations. According to Sutherland, markets are not ignoring the risks, but rather adjusting expectations in line with a more balanced policy outlook.
Domestic Outlook: Rate Cuts Begin
Australia has commenced a rate-cutting cycle, with the RBA delivering a 25 basis point reduction. Inflation has returned to target, the labour market remains strong, and real wages may begin to lift. Fiscal policy has also supported resilience. However, private sector investment remains subdued—a key uncertainty as policy settings begin to loosen.
Sutherland noted that while the economic low point may be behind us, the strength and speed of recovery will depend on how households and businesses respond to these changing conditions.
Global Themes: Sentiment Lags the Data
In the US, core economic indicators remain strong, but softer data—such as consumer and business sentiment—suggests unease beneath the surface. As Sutherland highlighted, the divergence may reflect market uncertainty rather than economic weakness. Meanwhile, pro-growth policies from the US administration are expected to take greater effect in the second half of the year, which may help extend the current cycle.
Geopolitical risks and ongoing trade policy shifts are expected to remain dominant themes, with markets closely watching for further developments.
Portfolio Strategy: Navigating Ambiguity
WTW’s approach remains focused on diversified, multi-driver portfolio construction—especially important in an environment where strategic repositioning is difficult due to the high degree of uncertainty.
For retirees and lower-risk portfolios, recent yield levels remain attractive, although WTW expects only a further 50 basis points of RBA cuts from here. The current rate environment continues to offer support without signalling a return to the ultra-low settings of prior years.
For any questions or to discuss your portfolio, reach out to your MGD Wealth advisory team.
Important Note: Any advice included in this video and article is general and has been prepared without taking into account your objectives, financial situation or needs. As such, you should consider its appropriateness having regard to these factors before acting on it. Before you make any decision about whether to acquire a certain financial product, you should obtain and read the relevant product disclosure statement.
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Stephen Furness
Stephen Furness is a Director at MGD Wealth, Chief Investment Officer for UHNW client investment offices at MGD Private, and Chair of LDI Connect Asset Management’s Investment Committee. Recognised as a Barron’s Top 150 Financial Adviser and Accredited Investment Fiduciary®, he works closely with leading global consultants to guide investment governance and long-term portfolio strategy for HNW and UHNW investors.
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