Stocks tumble on rate rise fears

By the Editorial Team · Friday, September 25, 2026

Australian shares declined sharply as investors braced for a likely interest rate hike next week and rising oil prices pushed Brent crude above $102 per barrel. Despite gains in energy stocks, losses in the materials and financial sectors, along with rising unemployment to 4.6 percent, signaled economic challenges ahead and uncertainty around future Reserve Bank of Australia policies.

Australian shares fell sharply on Thursday as concerns mounted over a likely interest rate increase next week, compounded by rising oil prices that pushed Brent crude above US$102 a barrel. The benchmark S&P/ASX 200 index dropped 63.31 points, or 0.72 percent, to close at 8,702, while the broader All Ordinaries index declined 59.2 points, or 0.66 percent, to 8,897.

The Australian dollar advanced slightly against the US dollar, trading at 70.34 US cents. Despite the overall market decline, six of the 11 sectors recorded gains, led by energy stocks benefiting from higher oil prices. Major energy producers posted increases, with Woodside up 1.54 percent at $31.61, Santos rising 1.79 percent to $8.55, and Ampol gaining 1.66 percent to $44.80.

However, falls in the materials and financial sectors weighed heavily on the market. Mining giants experienced notable losses: BHP decreased 1.69 percent to $61.02, Rio Tinto declined 0.69 percent to $166.46, and Fortescue eased 0.59 percent to $16.75. Financial shares were also hit amid growing expectations for a Reserve Bank of Australia (RBA) rate hike, with all four major banks retreating. Commonwealth Bank briefly touched a February low of $147.41 before recovering slightly to close down 0.71 percent at $149.98. National Australia Bank slipped 1.32 percent to $38.15, Westpac fell 1.8 percent to $34.13, and ANZ lost 1.06 percent, ending at $37.43.

Economic data released ahead of the RBA’s policy meeting showed Australia’s unemployment rate rising to 4.6 percent, the highest level since 2021. Betashares chief economist David Bassanese characterized the uptick as a "final nail in the coffin" for the prospect of an interest rate increase at the September 28–29 meeting. He noted the RBA is likely to view the rise in unemployment as an unwelcome but necessary development to ease inflationary pressures, with a roughly even chance of a subsequent rate hike around early November’s Melbourne Cup Day.

Energy markets were further unsettled following remarks by Iranian President Masoud Pezeshkian at the United Nations General Assembly, where he stated that Tehran would resist threats and not concede control over navigation through the Strait of Hormuz, a key passage for global oil shipments.

Among individual stocks, Premier Investments, owner of Peter Alexander and Smiggle, jumped 7.08 percent to $11.95 after meeting previously downgraded full-year sales guidance of $795.5 million, a 2 percent decline compared to the prior year. Washington H. Soul Pattinson shares rose 6.2 percent to $48.33 after reporting statutory net profits after tax had surged 501.9 percent to $2.19 billion, following a $14 billion merger with Brickworks completed in September 2025 that ended a 56-year cross-shareholding.

Australian Ethical Investments remained steady at $4.15 after announcing that long-serving chair Steve Gibbs will retire by June 30, 2028. Meanwhile, Nine Entertainment shares tumbled 7.59 percent to 67 cents after managing director of streaming and broadcast Amanda Laing announced her departure from the company.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.