Week commencing 11 May 2026

US markets rally as the ASX 200 faces domestic headwinds

United States (US) equity markets delivered another impressive week, with both the S&P 500 and the Nasdaq 100 carving out fresh all‑time highs and remaining on track for a sixth consecutive week of gains. Solid corporate earnings, renewed enthusiasm for artificial intelligence (AI) exposure and resilient economic data enabled investors to largely shrug off the ongoing Middle East stalemate and elevated oil prices.

Closer to home, the ASX 200 is trading close to flat for the week around 8750 as it attempts to snap a three‑week losing streak. This follows the Reserve Bank of Australia (RBA) lifting rates by 25 basis points (bp) on Tuesday, effectively unwinding all 75 bp of cuts delivered in 2025. Losses in the energy, consumer‑facing and utilities sectors offset gains in the major banks and miners, while persistent earnings downgrades and fuel security concerns linked to Middle East disruptions added a further layer of caution for local investors.

The week that was: highlights

• US factory orders for March rose 1.5% month‑on‑month (MoM), comfortably exceeding the 0.5% consensus forecast
• US Institute for Supply Management (ISM) services purchasing managers’ index (PMI) for April edged lower to 53.6, just missing the 53.7 consensus forecast, but still indicating expansion
• US Job Openings and Labor Turnover Survey (JOLTS) job openings for March fell to 6.866 million, coming in slightly above expectations of 6.84 million
• US ADP employment change for April showed a gain of 109,000 jobs, comfortably beating the 99,000 consensus estimate
• US initial jobless claims rose by 10,000 to 200,000 in the latest week, still below the 205,000 forecast
• China’s (CN) RatingDog services PMI for April came in at 52.6, rising from 52.1 previously and exceeding the 52.0 consensus forecast
• The RBA raised its official cash rate by 25 bp to 4.35%, in line with market expectations
• New Zealand’s (NZ) unemployment rate for the first quarter (Q1) edged lower to 5.3%, coming in better than the 5.4% consensus
• West Texas Intermediate (WTI) crude oil fell 4.67% to $97.15
• The US dollar index (DXY) traded flat at 98.22
• Bitcoin gained 1.87% to $80,025
• Gold rose 1.95% to $4703
• Wall Street’s gauge of fear, the volatility index (VIX), rose marginally to 17.07 from 16.98 the previous week.

Key dates for the week ahead

Australia & New Zealand

• AU – Westpac consumer confidence, May: Tuesday, 12 May at 10.30am AEST
• AU – NAB business confidence, April: Tuesday, 12 May at 11.30am AEST
• AU – home loans quarter-on-quarter (QoQ) Q1: Wednesday, 13 May at 11.30am AEST
• AU – investment lending for homes Q1: Wednesday, 13 May at 11.30am AEST
• NZ – Business NZ manufacturing PMI, April: Friday, 15 May at 8.30am AEST

China & Japan

• CN – consumer price index (CPI), April: Monday, 11 May at 11.30am AEST
• CN – producer price index (PPI), April: Monday, 11 May at 11.30am AEST
• CN – new yuan loans, April: Thursday, 14 May at around 12.00pm AEST

United States

• US –CPI, April: Tuesday, 12 May at 10.30pm AEST
• US – PPI, April: Wednesday, 13 May at 10.30pm AEST
• US – retail sales, April: Thursday, 14 May at 10.30pm AEST
• US – industrial production, April: Friday, 15 May at 11.15pm AEST

Europe & United Kingdom

• UK – gross domestic product (GDP) Q1: Thursday, 14 May at 4.00pm AEST
• UK – GDP March: Thursday, 14 May at 4.00pm AEST

Key events for the week ahead

CN: CPI

Date: Monday, 11 May at 11.30am AEST

China’s headline consumer price index rose 1.0% year‑on‑year (YoY) in March, below the 1.2% consensus and down from 1.3% in February. Core CPI, excluding food and energy, eased to 1.1% YoY from 1.8% the previous month, reflecting softer underlying price pressures following the Lunar New Year period.

The April reading will be closely watched for signs of renewed weakness. Consensus expects headline CPI to come in around 0.8% YoY. A softer‑than‑expected outcome would likely reinforce the case for further policy support from Beijing, especially as concerns over the property sector continue to linger. The sector remains a significant headwind for the broader economy, with weak buyer sentiment, falling home prices in many cities, and ongoing balance‑sheet pressures at developers continuing to weigh on consumption and investment.

China inflation rate chart

AU: Westpac consumer confidence 

Date: Tuesday, 12 May at 10.30am AEST

The Westpac–Melbourne Institute consumer sentiment index plunged 12.5% in April to 80.1, the largest monthly decline since the onset of the Covid-19 pandemic and the lowest reading since November 2023. The sharp fall was driven by spiking fuel prices following the escalation in the Middle East and the RBA’s latest 25 bp rate hike, which placed intense pressure on household finances and pushed near‑term expectations back to 2022–2023 cost‑of‑living crisis lows.

The survey period for the May update will include the RBA’s latest rate hike, which fully unwound last year’s 75 bp of cuts, and comes just ahead of the federal budget. It will provide an important early read on whether households are beginning to adjust to tighter policy settings.

Notably, fuel prices have since fallen back towards pre‑conflict levels following the government’s temporary cut to the fuel excise. Consensus is for a modest bounce in the index to around 81. Another weak print would reinforce expectations of slower consumer spending in the second half of the year and keep pressure on the RBA to tread carefully.

Australia consumer confidence chart

US: CPI

Date: Tuesday, 12 May at 10.30pm AEST

For March, US headline CPI rose 3.3% YoY, a sharp acceleration from February’s 2.4% and the highest reading in several months, driven largely by higher energy and shelter costs. Core CPI increased 2.6% YoY, only modestly higher than the previous month’s 2.5%.

Next Tuesday’s inflation update comes at a particularly sensitive time. At last week’s Federal Open Market Committee (FOMC) meeting, the Federal Reserve (Fed) kept rates unchanged but delivered its most divided vote since 1992. The removal of the ‘additional adjustments’ wording from the statement was interpreted as a clear pivot towards neutrality, making future rate hikes as plausible as cuts.

Markets will be watching closely for the impact of higher petrol prices stemming from the Middle East conflict. Consensus expects headline CPI to rise to 3.8% YoY, with core CPI climbing to 2.7%. A stronger‑than‑expected print would reinforce the hawkish tilt from the FOMC, while a softer outcome would help temper those concerns.

US core CPI chart

US Q1 2026 earnings

The US Q1 2026 earnings season continues next week with a more selective but still notable line‑up of reports from companies including JD.com, On Holding and Under Armour on Tuesday, Alibaba and Cisco on Wednesday, Robinhood Markets on Tuesday, Applied Materials and Figma on Thursday, and many more.