Market review
A summary of how financial markets performed during the third quarter of 2025.
International share markets had a strong run over the past quarter, with several major indices hitting record highs. Much of the optimism came from solid company earnings and continued excitement around artificial intelligence (AI), which remains a key driver of share market gains.
Global markets
Global equity markets posted impressive gains in Q3, led by the US and Asia. While European markets lagged slightly, most delivered positive returns.
In the US, the S&P 500 Index and Nasdaq 100 Index rose 8.1% and 11.4% respectively, with the technology sector the standout. Meanwhile, Asian markets also delivered impressive returns. Japan’s Nikkei 225 Index rose 11.8%, while China’s Shanghai Composite Index surged 13.9% to a 10-year high – it also saw strong returns in its AI-related sector.
Meanwhile, in Europe, the Euro Stoxx 50 Index was up 4.5%, and France’s CAC 40 Index gained 3.3%. Political uncertainty in France, following the removal of Prime Minister François Bayrou after a failed confidence vote, held back performance.
Bond markets were more mixed. In the US, bonds rose after the Federal Reserve (the Fed) cut interest rates for the first time this year. Signs of a weakening labour market suggest more rate cuts could be on the way, which typically supports bond prices. In contrast, European bonds underperformed after the European Central Bank (ECB) decided to hold rates steady, shifting to a more cautious “wait-and-see” approach after eight consecutive cuts. And in Japan, bond prices fell as some government bond yields rose to multi-decade highs. When bond yields rise, bond prices tend to fall.
New Zealand market
New Zealand’s share market also had a positive quarter. The NZX 50 Index rose 5.5%, reaching its highest level this year, although it lagged behind some of its global peers.
The Reserve Bank of New Zealand (RBNZ) cut the Official Cash Rate (OCR) to 3.00%, citing a slowdown in the domestic economy. This followed news that Gross Domestic Product (GDP) fell by 0.9% in the second quarter, a far worse result than forecasts. The construction and manufacturing sectors showed particular weakness.
Annual inflation rose to 2.7% for the three months ending June. While still within the RBNZ’s target range, many households continue to feel the pinch, especially when it comes to food and housing costs.
Across the Tasman, Australian share markets also delivered positive returns, with the ASX 200 Index up 4.7%. Like New Zealand, it underperformed several of its global counterparts, in part due to some signs that inflation may remain persistently high.
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Important information
This information is prepared by ANZ New Zealand Investments Limited for information purposes only.
Past performance does not indicate future performance. The actual performance realised by any given investor will depend on many things, is not guaranteed, and may be negative as well as positive.
While we’ve taken care to ensure the information is reliable, we don’t warrant its accuracy, completeness, or suitability for your intended use. To the extent the law allows, we don’t accept any responsibility or liability arising from your use of or reliance on this information.