Optimism about AI continues to offset Middle East uncertainty
Thursday, 4 June 2026
Market Summary
In mid-afternoon trading on Wednesday, US markets fell as oil prices moved higher amid concerns the ongoing US-Iran conflict would keep lifting inflation, and as the OECD slashed its global growth outlook for the same reason, amid a backdrop of the US and Iran launching new strikes.
The tech-heavy Nasdaq exchange declined 0.9% in its latest session, the Dow Jones declined 0.8% and the S&P 500 declined 0.6%.
The pan-European Stoxx 600 also moved lower, closing down 0.1% as escalating tensions in the Middle East once again drove oil prices higher and weighed on investor sentiment.
Asian markets were mixed on Wednesday. Optimism about the AI trade continued to offset uncertainty surrounding the Middle East and the opening of the Strait of Hormuz.
Japan’s Nikkei hit a new high in its latest session, up almost 3%, South Korea’s Kospi rallied, and China’s Shanghai Composite Index rose 0.22%.
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Back here, New Zealand’s S&P/NZX50 experienced an early boost from a US tech rally on Wednesday, but by end of play had deflated 0.4% on fears of a resumption of the Iran war and continued oil price spikes.
Business news in the day included a surge in residential building permits in April, heavily driven by new Auckland apartment blocks. The news hit building sector-adjacent stocks positively, sending Fletcher Building up 1% and CDL Investments up 2.9%. Economic uncertainty was also not holding back home sellers, with new listings last month at the highest level since 2018, Realestate.co.nz said.
That said, the actual pipeline for Auckland apartments (rather than intent as measured through consents) was also looking anaemic, according to data from CBRE.
Other data out during the day found the country’s merchandise terms of trade - which measures the purchasing power of a country's exports relative to its imports - in the first quarter fell 2% quarter-on-quarter, more than the 1.2% expected. The country’s fuel stocks had all dropped in the latest MBIE stocktake, and the Commerce Commission said it would try and ping BP for faulty pricing.
On the main board, Vista Group led the decliners, down 7.38% on profit taking by institutional investors after the stock rallied earlier in the week. Bitcoin fell 6.76%, KMD Brands dropped 6.10% and Trade Window Holdings retreated 4.55%. Larger stocks - including Spark and Auckland Airport - also sagged in the day.
Gains were small. TruScreen rose 5.56%, Eroad advanced 5.47%, IkeGPS was up 5.17%, Promisia Healthcare gained 4.55% and Comvita rose 4.29%.
In Sydney, the S&P/ASX 200 closed up 0.70% Wednesday, led up by uranium play Paladin Energy, which gained 11.48% on a generally strong sector, while Tuas Ltd, a telco firm that owns and operates Simba Telecom, the fourth-largest mobile network operator in Singapore, rose 10.50% in volatile trading after the stock plummeted 65% in value in May.
While we slept
The OECD has warned an extended global slowdown is imminent if the war in the Middle East continues. The Organisation for Economic Cooperation and Development cut its global growth outlook on Wednesday, saying it’s now expected to slow from 3.4% in 2025 to 2.8% in 2026, before recovering to 3.1% in 2027, if the US-Iran war and energy prices start easing by the middle of this year. The OECD says the flip side is if the stalemate continues and no peace deal is achieved soon, the global growth outlook could slump to 2.1% for 2026. If disruptions to shipping and energy infrastructure continue into 2027, growth would fall sharply to 1.8% in 2027, and tip some economies into, or close to, recession.
SpaceX plans to make its IPO at a price of US$135 per share, with a valuation of US$1.75 trillion, according to CNBC. The valuation would make Elon Musk’s firm the seventh-biggest company in the US, ahead of Tesla, which has a market cap of about US$1.6 trillion. The space company is set to debut on the Nasdaq on June 12. SpaceX will go public under the ticker SPCX, and is set to be the biggest IPO ever - more than triple the size of Alibaba, which is so far the largest US IPO to date. Its debut comes at a time when as AI companies Anthropic and OpenAI are each racing to go public.
What’s up today
In today’s The Post, Tom Pullar-Strecker reports diesel wins out over LNG for power fix if neither is needed after 2039, and banks got off lightly on Budget day but are set to become an election issue. Miriam Bell reports Auckland apartment pipeline falls to lowest level since 2014, Greg Boland writes SpaceX leads a new generation of IPOs and in today’s Global Read, AP reports why Pope Leo's first encyclical went viral and how it speaks to his papal approach.
The Insurance Council of New Zealand holds its annual conference today.