Global stocks were generally trending higher last week until Friday, when Israel’s attack on Iran triggered an understandable sell-off.

Week Ahead: Federal Reserve Meeting
The mid-week US Federal Reserve meeting will be the central global focus. While interest rates are expected to remain unchanged, market attention will centre on the updated economic projections and the interest rate “dot plot.” Given the limited impact of tariffs so far and the ongoing uncertainty around future tariff policy meaningful shifts in the Fed’s outlook aren’t expected - the dot plot will likely still reflect two rate cuts in 2025 and another two in 2026.

Global Market Trends
Since the early April lows, US and growth/tech stocks have regained relative strength.
If the broader equity downtrend resumes, these areas could lead the decline. However, if the rebound persists, recent predictions of US tech’s decline may again prove premature.

Local Developments
Last week’s local data showed a continued convergence in business and consumer sentiment. While consumer confidence remains subdued, it's gradually improving amid easing inflation and rate cuts. Conversely, business sentiment, once buoyant—is softening toward more typical levels.

The key domestic focus this week will be Thursday’s May labour market report, expected to show continued solid employment growth (~20,000 jobs) and a steady 4.1% unemployment rate.
Despite Q1’s weak GDP, firm job growth undermines the case for a July RBA rate cut. That said, I still expect a move in August, assuming a benign Q2 CPI outcome.

Rick Maggi, Financial Advisor, Westmount Financial, Perth

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Disclaimer
This article has been carefully prepared by Westmount Securities Pty Ltd (ABN 42 090 595 289, AFSL 225715) for general information purposes only. However, neither Westmount Securities Pty Ltd nor any of its affiliates guarantee the accuracy or completeness of any statements contained herein, including any forecasts. It is important to note that past performance is not a reliable indicator of future outcomes. This material does not consider the specific objectives, financial circumstances, or needs of any particular investor. Therefore, before making any investment decisions, investors should assess the relevance of this information to their individual situation and consult professional advice, taking into account their unique objectives, financial position, and needs.