SYDNEY, May 9, 2026, 18:29 (AEST)
Australian stocks scraped out a modest weekly gain, but that was overshadowed by a steep Friday slump that erased almost A$50 billion in value and dragged the S&P/ASX 200 down to 8,744.4. The index tumbled 133.7 points, or 1.51%, marking its sharpest one-day loss in seven weeks. Despite the bruising finish, the benchmark still eked out a weekly rise of 14.6 points, or 0.17%.
This shift is drawing attention: investors aren’t just focused on earnings anymore. Oil shock risk is back in the mix, along with a Reserve Bank of Australia that’s turned more hawkish, and there’s fresh concern about higher fuel costs rippling out and lifting broader prices — those “second-round effects” policymakers highlight when a single price spike starts pushing others higher. Reserve Bank of Australia
The Reserve Bank of Australia lifted the cash rate by 25 basis points to 4.35% on Tuesday—a move that comes as fuel and commodity prices keep feeding into inflation. The central bank flagged that any escalation or drawn-out conflict in the Middle East could drive energy prices even higher and weigh on growth both in Australia and globally.
Sellers swept through most corners of the market Friday. Financials fell hard, down 2.25%, with real estate tracking slightly behind at a 2.23% loss. Utilities dropped 2.03%, and energy was off by 1.63%. Communication services? The lone standout among major sectors, ticking up by the close. On the S&P/ASX 300, losers dominated: 217 stocks finished in the red, just 69 managed gains.
The banks bore the brunt. Westpac slid 4.8% after going ex-dividend. National Australia Bank shed 2.9%, and Commonwealth Bank gave up 1.9%. The sector stayed in the red following the RBA’s third rate hike this year.
Oil barely budged the needle for investors. Brent crude finished Friday at $101.29 a barrel, up 1.23% after U.S. and Iranian forces exchanged strikes. Still, both Brent and U.S. crude marked weekly losses of over 6%. “The market was on the cusp of a breakthrough or a return to fighting,” said John Kilduff, partner at Again Capital. Reuters
Macquarie Group bucked the earnings trend. The investment bank posted a full-year net profit of A$4.85 billion, a 30% jump that topped Visible Alpha’s A$4.39 billion consensus. Surging commodity and trading business—driven by Middle East volatility fueling oil and gas volumes—did the heavy lifting. Shares surged to an all-time high of A$249.49, then slipped back to finish down with the broader market.
Macquarie Chair Glenn Stevens called the war a tough challenge for policymakers, citing uncertainty over its duration. “Supply is constrained, prices rise and for macroeconomic policy that is a very difficult combination to deal with,” he said. Reuters
Company headlines cut both ways but left the market’s trajectory unchanged. News Corp added 2.6% thanks to a strong quarterly, bolstering the communication services sector. Block surged 4.8% after it lifted its profit outlook for the year. Tabcorp, though, slumped another 14.2% on Friday—deepening its slide as AUSTRAC launched an enforcement probe into its controls for money-laundering and terrorism-financing risks.
The next shift could swing either direction. Should disruptions in the Strait of Hormuz subside, oil prices might drop, easing inflation worries. But if the conflict lingers, AMP chief economist Shane Oliver told ABC, “the greater the hit to the global and Australian economies” the longer the strait stays closed. ABC News
The market clocks just a narrow weekly rise and faces a busier stretch for policy ahead. National Australia Bank’s chief economist Sally Auld noted the RBA’s “clear preference” for price stability and said, “For now, we have the RBA on hold at 4.35%.” Reuters
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