Market Commentary

September shrugged off its reputation as the worst performing month of the year with a relatively decent showing across most global markets. This helped mollify angsty investors and validated the ubiquitous fine print that you should never rely on past performance as an indicator of future returns.

Wall Street did the heavy lifting. Labour market data surprised on the downside, with more than 20,000 fewer jobs than expected added in August. Meanwhile, the revelation that jobs growth was overstated by close to a million in the year to March suggested the employment market’s been weakening for a while. This was, paradoxically, music to investors’ ears given the implications for interest rates.

Indeed, September ushered in America’s first rate cut of the year, a cautious quarter-point nudge, described by Chair Jerome Powell as a “risk management cut.” Presumably, he was referring to prevailing economic risks, rather than his own precarious position. Either way, expectations should be managed accordingly.

Tech hogged the limelight again, led by Oracle’s jaw-dropping 40% leap in a single day and a steady Apple rally on strong iPhone 17 sales. It wasn’t all fun and games, though. Tech titans trembled in their trainers when President Trump proposed a US$100,000 fee for highly-skilled visas, while a batch of new tariffs caused much furrowing of brows around the world. The pesky spectre of a US government shutdown at the end of the month didn’t help.

Back home, our local market fared well, though it lagged the US thanks to our chronic lack of tech names. Rising food prices bit deeper into household budgets, while GDP data showed the economy shrinking more than expected in the June quarter. Still, a late-month flurry of merger and acquisition activity (here’s looking at you, Restaurant Brands) gave the market a sugar hit just in time for the closing bell.

Across the ditch, Australian stocks were among the few underperformers. Early gains from gold miners riding record bullion prices weren’t enough to save the index from hotter-than-expected inflation. With August CPI surprising on the upside, the RBA kept rates on hold, leaving investors nursing a September hangover.

Against this backdrop, the S&P 500 finished September up 3.5%, while the tech-focused Nasdaq rose 5.6%. The NZX 50 gained 2.8% over the month, while the ASX 200 dropped by 1.4%.

Meanwhile, the FTSE 100 added 1.8%, a respectable showing given Britain’s economic backdrop. Long-term borrowing costs hit their highest since the late ‘90s, while ballooning public sector debt all but ensures Chancellor Rachel Reeves will wield the tax stick in her November budget.