Market winners & losers after six months of extreme volatility

Although a sense of relative calm has returned to markets after the ceasefire between Israel and Iran, they remain volatile after six months of volatility

The first half of 2025 has been marked by extreme volatility in global markets, primarily influenced by geopolitical events and economic policy shifts. Early in the year, US missile attacks on Iran caused a brief surge in oil prices, sparking fears of instability in the Middle East. However, a ceasefire brokered by the US between Israel and Iran helped calm markets, resulting in a 12% drop in oil prices, marking the biggest weekly fall since March 2023.

US markets saw dramatic swings in sentiment, with a sharp decline in stock values following President Trump's aggressive tariff announcements, but the subsequent pause in tariff implementation led to a strong recovery. The S&P500 closed at a new all-time high by mid-year, though the NZX50 remained down 3.7%.

The year began with optimism, fuelled by expectations of tax cuts and pro-business policies under Trump's re-election. However, markets were rattled by trade tensions and fears of a global recession, leading to a 20% drop in the S&P500. Despite this, investor sentiment improved as the US economy remained resilient, with a focus shifting to AI and growth.

On the commodity front, gold and Bitcoin were among the top performers, gaining 24.2% and 14.9%, respectively. Meanwhile, oil prices fell by 10.1% amid easing concerns about global supply disruptions. The US dollar experienced its largest drop in years, down 10.4%, with international sentiment toward the dollar weakening.

In New Zealand, the local market saw strong performances in sectors like agriculture, horticulture, and seafood. Companies such as A2 Milk, Sanford, Fonterra, and Turners Automotive delivered solid returns. However, the construction, retail, and hospitality sectors faced challenges, with companies like Ryman Healthcare and KMD Brands suffering significant losses.

The outlook for the second half of the year remains uncertain, with ongoing concerns about US debt, trade policies, and the sustainability of global economic growth.