Investment market performance Q3 2025

As we navigate the complexities of the financial landscape, it’s important to stay informed about how investment markets are performing. The third quarter of 2025 (July 1 – September 30) presented both challenges and opportunities for investors. In this article, we take a closer look at how investment markets performed over the quarter, and we highlight some of the key economic factors from across the world that influenced these outcomes. 
 

Australia

Share market: The Solactive Australia 200 Index, which represents Australia’s top 200 companies, was up +4.7% over the quarter. Positive returns were largely due to strong performance in the mining sector, led by BHP Group Ltd, followed by strong performance in the banking sector. 

Interest rates: Australia’s inflation rate remained within the Reserve Bank of Australia’s (RBA) target range at 2.1% in Q2, down from 2.4% in Q1 2025. Core inflation, which excludes volatile items like food and energy, slowed from 2.9% in Q1 to 2.7% in Q2 2025. The RBA reduced the cash rate from 3.85% to 3.60% during Q3 2025 but kept the rate on hold in September, as markets had expected. Markets view another cut this year as unlikely.

Housing market: The Australian housing market, as measured by CoreLogic's Home Value Index (HVI), recorded an increase of +1.4% in Q2 2025, following a +0.9% increase in Q1 2025. The increase was attributed to falling interest rates, which have acted as a catalyst for renewed momentum. 

Australian dollar: The Australian dollar (AUD) continued to recover against the US Dollar (USD) over the quarter, rising by 1.1% from 65.7 to 66.1 cents. The continued recovery is due to factors such as a softer USD, caused by expectations of modest interest rate cuts in the US, along with stronger economic data that reduces the chance of further interest rate cuts in Australia. 
 

New Zealand

Share market: The Solactive New Zealand Top 50 Index saw a +5.9% rise in Q3 2025, with the positive return due to strong performance in key infrastructure and food production companies. 

Housing market: The QV House Price Index showed a -0.8% drop in house prices nationally in the three months to the end of August 2025. That is 0.2% higher than August 2024 and is 13.4% below the market peak in January 2022. The average property value nationally is now NZ$906,977. 

Interest rates: The official cash rate was reduced from 3.25% to 3.00% during Q3 2025, with the market expecting a further reduction to at least 2.75% by the end of 2025. New Zealand’s economy, which exited recession in Q4 2024 as the economy began to grow again, saw a contraction in Q2 2025 of -0.9%, which was worse than markets had expected. Inflation was 2.7% in Q2 2025, slightly higher than the 2.5% recorded in Q1 2025. 
 

United States

Share market: US stocks had a strong quarter, supported by a strong earnings season.  With the effect of tariffs on inflation less than feared, a Federal Reserve rate cut also supported US stocks. 

Interest rates: The Federal Reserve cut interest rates from 4.5% to 4.25% in Q3 2025. This is in line with their goals of achieving maximum employment and price stability. The Personal Consumption Expenditures (PCE) inflation rate stood at +2.7% at the end of August 2025, while core inflation had eased to +3.1%.
 

Global trade and geopolitical uncertainty 

As trade tensions eased, Q3 2025 saw positive returns across financial markets, with technology giants again seeing large gains as optimism around AI continued. Bond markets also saw positive returns, despite the market focussing more on the sustainability of government’s fiscal spending plans.

We continue to monitor the major drivers of markets and their impact on Resolution Life’s Australasian portfolios. While investing always involves managing uncertainty, the current environment is mired in elevated uncertainty. The best form of defence for portfolios is to continue to be well diversified, with exposure to a range of asset classes that can help during volatile times.   

<sub>Sources:  
1. Solactive Australia 200 Index Performance - Solactive 
2. Solactive New Zealand Top 50 Index Performance – Solactive  
3. Reserve Bank of Australia Monetary Policy - RBA  
4. Reserve Bank of New Zealand Official Cash Rate - RBNZ     
5. Australian House Prices – CoreLogic Home Value Index  
6. NZ house Prices – QV House Price Index  
7. FactSet   
8. U.S. Bureau of Labour Statistics
9. Trading Economics</sub>  
 

What you need to know

Preparation of this document and the opinions expressed in it may involve material elements of subjective judgement and analysis. Unless specifically stated otherwise they are current as of 9 October 2025 and are subject to change without notice.