Category: Stock Market

Oil prices are back under pressure after a sharp pullback from recent highs, putting the commodity firmly back in focus for investors.

After rallying strongly through late January, crude oil has slipped around 5%, with West Texas Intermediate (WTI) now trading near US$61.90 per barrel. Brent crude has also moved lower, sitting around US$65.95 per barrel.

The move marks a shift in momentum after oil briefly pushed toward multi-month highs. It has also reopened debate over whether prices are entering a new phase or just consolidating after a volatile start to the year.

Oil gives back recent gains

Oil began the year with firmer momentum as geopolitical tensions increased, and traders focused on potential supply risks.

Those conditions helped push prices higher through January. However, the recent drop has erased much of that short-term rally, bringing oil back toward levels seen earlier in the year.

At current prices, WTI remains well above its 2025 lows, but still comfortably below levels that would suggest a sustained breakout. That leaves oil trading in a range-bound pattern, with sentiment shifting quickly based on news headlines and macro signals.

Markets turn their attention to what comes next

With oil back near US$62 per barrel, the market’s focus has shifted away from short-term price moves and toward what could drive the next sustained trend.

Traders are watching geopolitical developments closely, particularly in the Middle East, where any change in tone can quickly affect oil pricing. At the same time, broader financial markets are playing a growing role, with currency movements and global risk sentiment influencing commodity prices.

Supply conditions also remain important. Major producers continue to keep output steady, and global inventories remain relatively comfortable. Without a clear supply shock, oil prices have struggled to push meaningfully higher for long.

What this means for ASX energy stocks

Attention is increasingly turning away from oil price moves and toward underlying company fundamentals.

With crude prices pulling back, attention is likely to shift toward cost control, cash flow, and balance sheet strength. Woodside Energy Group Ltd (ASX: WDS) may benefit from its diversified oil and LNG mix, while Santos Ltd (ASX: STO) could face closer scrutiny due to its upstream exposure.

At current oil levels, neither company is under significant pressure, but sustained weakness would likely weigh on earnings forecasts.

Foolish Takeaway

Oil’s move back towards US$62 highlights just how quickly momentum can change in commodity markets. With prices sitting in the middle of a broad trading range, the next move will likely depend on confidence, geopolitics, and shifts in global markets rather than supply alone.

For those following Woodside and Santos, oil prices remain an important factor to watch as the year progresses.

The post Oil pulls back as markets look to the next catalyst. Here’s what to watch appeared first on The Motley Fool Australia.

More reading

• Buying ASX energy shares? Here’s how Santos and Woodside shares stacked up in January
• 5 things to watch on the ASX 200 on Tuesday
• Here’s the earnings forecast out to 2028 for Woodside shares
• 5 things to watch on the ASX 200 on Monday
• 3 ASX 200 shares I would buy in February

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The team at Morgans has been busy running the rule over a number of ASX 200 shares this week following the release of updates.

Let’s see whether the two listed below have been given buy, hold, or sell ratings this week. Here’s what the broker is saying about them:

Graincorp Ltd (ASX: GNC)

Morgans was disappointed with this grain exporter’s guidance update. It highlights that its earnings guidance was significantly weaker than expected due to margin pressures. Unfortunately, the broker feels that these pressures are likely to remain in FY 2027.

However, due to recent share price weakness and its strategic assets, the broker has retained its accumulate rating with a reduced price target of $6.76 (from $9.05). It said:

GNC provided guidance ahead of its AGM on 18 February. Despite a large east coast winter grain crop, GNC continues to disappoint with FY26 earnings guidance materially below consensus expectations. While its volume guidance is unchanged, margins have weakened given the grain trading environment has deteriorated further. Importantly, its balance sheet remains strong. We have made material revisions to our forecasts. The difficult margin environment is likely to also affect FY27 earnings.

With payments to the insurer no longer required in big crop years, GNC’s fixed cost leverage should return when crop production issues around the world ultimately eventuate and global grain stocks tighten. However, we have now taken a much more conservative view on GNC’s ‘through-the-cycle’ EBITDA moving forward. GNC’s strategic assets are worth materially more than its current share price implies. However, the stock is lacking near term share price catalysts and investors will need to be patient.

PLS Group Ltd (ASX: PLS)

This lithium giant delivered a stronger than expected second-quarter update, with spodumene sales and revenue coming in ahead of expectations.

But this isn’t quite enough for a buy rating. The broker has upgraded PLS shares to a hold rating with a $4.60 price target. It explains:

Strong 2Q26 with a material spodumene sales and revenue beat vs MorgansF and consensus expectations. Cash balance +12% qoq with total liquidity of ~A$1.6bn leaving significant flexibility to fund growth and consider shareholder returns. Management is assessing the potential restart of the 200ktpa Ngungaju plant and other growth options in P2000 and Colina. Upgrade to HOLD (previously TRIM) on recent share price weakness with an unchanged A$4.60ps target price.

The post Are Graincorp and PLS shares buys, holds, or sells? appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Telix Pharmaceuticals Ltd (ASX: TLX) shares have dropped another 2.81% in Tuesday afternoon trade. At the time of writing, the shares are changing hands at a two-year low of $10.18 a piece. 

For the year-to-date the shares are now down 10.26% and they’re a huge 64.42% below this time last year. 

Share has caused the selloff?

Telix posted its Q4 FY25 results in late-January, where it said it had achieved its FY25 guidance of US$804 million. Although, it did come in on the lower end of guidance. Investors clearly aren’t pleased with the latest upside, with the trend for selling off shares continuing to accelerate.

It’s just one of many headwinds that Telix has faced over the past few months, including regulatory filing issues with the US Food and Drug Administration.

And now, many are questioning if Telix shares will drop below the $10 barrier?

How far will Telix shares fall?

Telix shares were last trading below the $10-mark over two years ago, in very-early January 2024. 

While it’s surprising that the share price has continued falling, given that analysts are widely bullish on the outlook for 2026, it is possible that there could be more declines to come.

The healthcare stock has faced setbacks from US regulatory bodies over the past year, and these headwinds have continued to weigh heavily on investor confidence. 

Meanwhile, the sector overall has also been under pressure. In fact, the S&P/ASX 200 Health Care (ASX: XHJ) index notably underperformed the wider market through the final months of 2025, and into early-2026. At the time of writing the index is 24.86% lower over the year.

Could it push even lower? Possibly. 

Will it be a sustained decline? Probably not.

The issue is that headwinds facing the biotech stock haven’t yet been resolved. And if regulatory setbacks continue or investor sentiment worsens, we could see the share price drop lower still.

But it’s worth noting that Telix still has exceptional growth potential amid a rapidly-growing market, so I expect that any declines below $10 would be temporary.

What do the experts think?

Analysts widely expect that the beaten-down biotech stock will climb higher in 2026.

The team at RBC Capital recently upgraded Telix shares to an outperform rating and said it believes that the current valuation represents a “compelling risk/reward profile” for longer-term investors. The broker has a $17 target price on Telix shares, which implies a potential 67% upside over the next 12 months, at the time of writing. 

Analysts at UBS are even more bullish on the shares. The team has a buy rating on Telix shares and a $31 target price. That implies a massive 204.5% upside from the current trading price.

I think, with potential upsides like that, at the current share price, Telix shares are a steal. 

The post Will Telix shares drop below $10? appeared first on The Motley Fool Australia.

More reading

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Motley Fool contributor Samantha Menzies has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Telix Pharmaceuticals. The Motley Fool Australia has recommended Telix Pharmaceuticals. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

At $31.04 (at the time of writing), it’s hard to believe this is where the Woolworths Group Ltd (ASX: WOW) share price sits today.

It’s hard to believe because, at this price, Woolworths shares are 11.6% below where they were five years ago. Yep, this time in 2021, this ASX 200 blue chip stock was going for $34.90 a share. Back in the middle of 2021, Woolies stock was over $40. That means the company remains down by about 25% from that high.

All in all, it has not been a good time to have owned shares of the ‘Fresh Food People’ over the past five years.

Woolworths has arguably gone through one of the toughest five-year periods of its recent history. The company has been dragged down by a litany of unfortunate events. Some were inside Woolworths’ control, others outside.

For one, investor concerns about several aspects of Woolworths’ business have come to the fore in recent times, most notably the sluggish performance of the company’s Big W and New Zealand divisions.

For another, the company has continually seen its leading position in the Australian grocery market erode in recent years, mostly to the benefit of its arch-rival Coles Group Ltd (ASX: COL).

The somewhat botched transition from former CEO Bradford Banducci to current CEO Amanda Bardwell didn’t help matters. Nor did the company’s most recent earnings report.

Woolworths share price: You won’t believe these dividend predictions

Back in August, we covered Woolworths’ full-year report for FY2025. Although this report contained some bright spots, there were areas of concern, too. The company did report a 3.6% rise in year-over-year revenue to $69.1 billion. However, thanks in part to a rise in costs and a gross margin slip, earnings before interest and tax in FY 2025 dropped by 12.6% to $2.75 billion. On the bottom line, net profit after tax fell 17.1% to $1.39 billion.

This all led Woolies to cut its final dividend for 2025 by 21.1% to 45 cents per share (fully franked). Over the entire year, Woolworths paid out a total of 84 cents per share. That was a 19.2% reduction on the $104 shareholders bagged over 2024 (disregarding the 40-cent special dividend).

But what is perhaps harder to believe than Woolworths’ dismal share price performance in recent years is where analysts see the company’s dividend heading next.

Last month, my Fool colleague looked at some analyst projections for the Woolworths dividend. And it makes for some exciting reading. Consensus estimates for the company’s payouts going forward are reprtedly a fully franked dividend total of 99.5 cents per share over 2026. That’s obviously a rapid rebound from the dividend cut investors endured last year.

From there, analysts anticipate that Woolworths could pay out a total of $1.13 in dividends per share in 2027, followed by $1.35 in 2028. If accurate, those payouts would represent year-on-year dividend increases of 18.45%, 13.57% and 19.46%, respectively.

If Woolworths does indeed fund those payouts, it would give the stock forward dividend yields of 3.21%, 3.64% and 4.35% at current pricing. That’s opposed to the company’s present, trailing dividend yield of 2.7%.

However, we’ll have to wait and see if these analyst predictions are on the money.

The post Check out the Woolworths share price and dividend forecast for 2026 – it’s hard to believe! appeared first on The Motley Fool Australia.

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• Buying Coles stock? Here’s the dividend yield you’ll get

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Woolworths Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Qantas Airways Ltd (ASX: QAN) shares are pushing higher on Tuesday afternoon.

At the time of writing, the airline operator’s shares are up almost 1% to $10.25.

Why are Qantas shares rising today?

Today’s gain could have been supported by the release of an update on the Jetstar Japan business.

This afternoon, Qantas and Japan Airlines revealed that they have signed a non-binding memorandum of understanding (MoU) to facilitate the Narita-based low-cost carrier’s (LCC) transition to a new Japanese-based ownership structure. This is expected to set the airline up for its next phase of growth, sustainable development, and success.

Subject to further negotiation and regulatory approvals, Qantas intends to divest its full shareholding in Jetstar Japan, with Development Bank of Japan (DBJ) planning to enter as a shareholder.

It notes that DBJ has extensive aviation market knowledge and a proven track record in the aviation industry.

Jetstar Japan will maintain its independent LCC operations while creating new synergies with its shareholders to address rising inbound demand, promote regional travel, and enhance customer value and service quality.

Following the divestment, Qantas will concentrate its resources on its core Australian operations, Qantas and Jetstar Airways, to further accelerate the largest fleet renewal program in the company’s history.

Once the deal completes, Jetstar Japan will refresh its brand from Jetstar to a new brand, with the aim of further establishing itself as a leading Japanese LCC under this new brand and identity.

Commenting on the news, Qantas’ CEO, Vanessa Hudson, said:

We’re incredibly proud of the pioneering role Jetstar Japan has played in the low-cost aviation sector in Japan and sincerely thank our Jetstar team members for their unwavering commitment to maintaining excellent safety, operational and service standards for millions of customers.

We’re confident the new ownership structure will deliver greater value to customers, benefitting from the Development Bank of Japan’s domestic and international aviation knowledge and industry expertise as well as their strong, long-standing relationships with national and regional tourism bodies. We thank Japan Airlines for their strong partnership and look forward to continuing to work together during the transition and in oneworld.

Japan Airlines’ president and CEO, Mitsuko Tottori, added:

We are delighted to announce this new beginning for Jetstar Japan alongside DBJ and Tokyo Century. We also extend our deepest gratitude to Qantas for their 14-year partnership in establishing and developing the LCC market in Japan. By moving to this new structure, we will respond flexibly to market changes and maximize synergies with the JAL Group to achieve sustainable growth for JJP as a key LCC at the expanding Narita Airport.

The post Qantas shares higher on Jetstar Japan sale appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

When a stock falls more than 40% from its recent high, it usually scares investors away. But sometimes that fear creates opportunity rather than danger.

That’s how I’m starting to feel about Zip Co Ltd (ASX: ZIP) shares right now.

After dropping around 45% from their October high, Zip shares look deeply out of favour despite the business continuing to deliver strong operating momentum. Based on its latest update, I think the market may be focusing on the wrong things.

A sharp share price fall, but not a broken business

Zip’s share price weakness hasn’t been driven by a collapse in fundamentals. Instead, it has largely followed a broader sell-off across growth and fintech stocks, combined with some nervousness around tech valuations more generally.

What stands out to me is that this sell-off has occurred while Zip is producing some of the strongest operating results in its history.

In its most recent quarterly update, the company delivered record cash EBITDA of $62.8 million, up 98% year on year. Total transaction volume rose nearly 39%, while total income increased by more than 32%. Those aren’t the numbers of a business going backwards.

The US business is growing

The most important part of the Zip story continues to be the United States.

US transaction volume rose more than 47% year on year in US dollar terms in the first quarter, while revenue climbed over 51%. Active customers increased by more than 480,000 over the past 12 months, and customer engagement metrics like average spend and transactions per customer also moved higher.

What I like here is that this growth is not being bought at any cost. Unit economics remain solid, with cash net transaction margins holding up and bad debts staying within target ranges. In other words, Zip is growing quickly without losing discipline.

Management upgraded its expectation for US transaction volume growth to be above 40% for FY26, which suggests momentum continued into the second quarter.

This appears accurate, with one Australian broker suggesting that app download data points to a very strong finish to 2025.

Improving profitability and operating leverage

One of the biggest changes at Zip over the past year has been the shift in how the business is viewed.

This is no longer a company burning cash in pursuit of scale. Zip is now producing meaningful operating leverage, with operating margins lifting to 19.5% from 13.1% a year ago.

That improvement has been driven by better funding costs, disciplined expense control, and the benefits of scale flowing through the model. The company also finished the quarter with more than $450 million in cash and liquidity, giving it flexibility to fund growth and return capital.

In fact, Zip recently increased its on-market share buyback from $50 million to $100 million, which I see as a strong signal of confidence from management at current prices.

A large addressable market

Despite its growth to date, Zip still operates in enormous addressable markets.

Digital payments, embedded finance, and flexible credit options continue to gain traction, particularly in the US. Zip’s integration with platforms like Stripe, Google Pay, and Google Chrome autofill shows how management is positioning the product deeper into everyday commerce.

The company is also expanding its product set with initiatives like Pay-in-2 and broader embedded finance offerings, which could open up new use cases beyond discretionary retail spending.

From my perspective, Zip looks like a business that is still early in its global growth journey, even if the share price suggests otherwise.

Foolish Takeaway

Zip shares are well below their highs, sentiment is weak, and growth stocks remain out of favour. But when I look through its updates, I see a company delivering record earnings, accelerating US growth, improving margins, and strengthening its balance sheet.

That disconnect is exactly what makes the opportunity interesting. I’m not pretending this is risk-free. Growth stocks can stay unloved for longer than expected. But with Zip now profitable, scaling, and buying back shares, I think this pullback looks like a chance to get greedy while others remain cautious.

The post Is it time to get greedy with Zip Co shares? appeared first on The Motley Fool Australia.

More reading

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Motley Fool contributor Grace Alvino has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Reserve Bank of Australia (RBA) has delivered a surprise interest rate hike at its policy meeting this afternoon. The official cash rate was lifted by 25 basis points to 3.85%.

The decision was announced at 2:30pm, catching parts of the market off guard after many economists had expected the RBA to hold rates.

The move marks the first increase in the cash rate since 2023 and signals a renewed focus on inflation, despite signs of slowing economic growth.

Why did the RBA lift rates?

In its post-meeting statement, the RBA pointed to persistently high inflation as the key driver behind today’s decision.

While headline inflation has eased from its peak, the RBA noted that underlying price pressures remain stronger than previously forecast. Services inflation in particular continues to run hot, supported by a tight labour market and resilient consumer demand.

The RBA warned that inflation is expected to remain materially above the 2% to 3% target band for longer. This prompted the Board to act pre-emptively to prevent inflation expectations becoming entrenched.

Governor Michele Bullock acknowledged that higher interest rates will place additional pressure on households, but argued that failing to act could ultimately require even more aggressive tightening later.

What does this mean for borrowers?

For mortgage holders, today’s decision is another hit to household budgets.

If banks pass on the full increase, a borrower with a $500,000 variable-rate mortgage could see repayments rise by roughly $80 per month. Larger loans will feel an even greater impact.

It also reinforces concerns that interest rates below 5% may not return anytime soon. That risk grows if inflation remains stickier than expected through 2026.

How did the share market react?

Australian shares dipped immediately following the announcement.

The S&P/ASX 200 Index (ASX: XJO) fell from 8,872 points to 8,846 points in the minutes after the RBA decision, as investors digested the implications of higher borrowing costs.

Despite the pullback, the benchmark index remains up around 0.8% for the day. This is being supported by strength earlier in the session across financials, resources, and energy stocks.

The relatively muted reaction suggests the market had partially priced in the risk of a rate hike.

What happens next?

Attention now turns to the RBA’s Statement on Monetary Policy, due later this week, which will provide updated forecasts for inflation, wages, and economic growth.

Markets will also be watching upcoming inflation and labour market data closely. If price pressures fail to ease as expected, today’s move may not be the last rate hike of this cycle.

The post RBA shocks borrowers with surprise rate hike to 3.85% appeared first on The Motley Fool Australia.

More reading

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• 5 things to watch on the ASX 200 on Tuesday

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Silver has recovered some ground following a sharp sell-off earlier this week.

At the time of writing, the price of silver has climbed back about 5%, trading around US$83 per ounce. This follows a huge plunge from its record highs that wiped out much of the gains achieved earlier in the year.

While the rebound has eased immediate pressure, trading remains volatile, and confidence has yet to fully return.

Let’s take a closer look.

What drove the recovery this week?

The rebound appears to be driven by a mix of calmer markets and bargain hunting.

After days of intense selling across commodities, markets have started to steady. Gold and other metals also moved higher, helping lift sentiment across the precious metals space.

Some traders stepped back into silver after prices fell sharply in a short period. Big drops like that often draw buyers looking for a quick rebound.

There was also less pressure from the US dollar. During the sell-off, a stronger dollar added to silver’s decline. However, as the dollar has now stabilised, some of that pressure has eased, giving silver room to bounce.

Is this a dead cat bounce or something more?

The market has yet to settle on a clear view.

Traders remain divided on whether the rebound signals renewed strength in silver or is simply a dead cat bounce after heavy selling.

Some remain cautious. A strong US dollar, expectations that interest rates stay higher, and reduced demand for safe-haven assets could limit how far silver recovers.

At the same time, silver continues to benefit from solid industrial demand. The metal is widely used in areas like solar panels and electronics, which helps provide underlying support.

Analysts who follow commodity markets say these longer-term drivers remain in place and could continue to support prices over time.

What about ASX–listed silver exposure?

Australian investors tracking silver gains have also seen price moves reflected in listed products.

The Global X Physical Silver Structured ETF (ASX: ETPMAG) is designed to deliver returns that generally match silver’s spot price in Australian dollars.

Backed by physical silver held in a vault, ETPMAG has also rebounded strongly, up around 5.93% to about $110.

Foolish Takeaway

Silver’s rebound looks encouraging after a steep fall, but it may be too early to call it a full recovery.

Sharp bounces often follow sharp sell-offs, especially in volatile markets. Whether the rebound holds will depend on price action around recent lows, the US dollar’s direction, and upcoming central bank signals.

The post Silver rebounds 5%. Is this a dead cat bounce or a recovery? appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The S&P/ASX 200 Index (ASX: XJO) was enjoying a strong day on Tuesday.

At 2:30pm AEDT, the benchmark Aussie index was up 1.1% at 8,872.8 points.

As you’re likely aware, that’s right when the Reserve Bank of Australia announced its latest interest rate decision.

In its first meeting of 2026, the RBA decided to increase the official cash rate by 0.25% to the new 3.85%.

With market expectations of an interest rate hike having increased to 72% heading into today’s announcement amid resurgent inflation, ASX 200 investors are taking the news better than might have been expected.

At time of writing, the benchmark index remains up 0.7% for the day, having tumbled 0.4% in the minutes following the RBA’s announcement.

Here’s what Australia’s central bank just reported.

ASX 200 slips as RBA boosts interest rates

The RBA board noted that while inflation has come down substantially since its peak in 2022, inflation “picked up materially” in the second half of 2025.

Explaining the decision to lift rates that’s weighing on the ASX 200 today, the RBA said:

The board has been closely monitoring the economy and judges that some of the increase in inflation reflects greater capacity pressures. As a result, the Board considers that inflation is likely to remain above target for some time.

As for those capacity pressures, the board acknowledged that the private demand growth has “substantially” exceeded its expectations. Private demand growth is being driven by both household spending and investment.

And the central bank’s inflation battle isn’t being aided by housing prices, which have continued to pick up.

The RBA also highlighted the lag time between its previous rate cuts and the impact on inflation.

“Credit is readily available to both households and businesses and the effects of earlier interest rate reductions are yet to flow through fully to aggregate demand, prices and wages,” the board said.

And, while good news for Aussie workers, ongoing tightness in the labour market could also continue to put upward pressure on prices and delay any rate relief for mortgage holders and ASX 200 investors.

According to the board:

The unemployment rate has been a little lower than expected and measures of labour underutilisation remain at low rates. Growth in the Wage Price Index has eased from its peak, but broader measures of wages growth continue to be strong and growth in unit labour costs remains high.

Connecting the dots, the RBA concluded, “The board judged that inflation is likely to remain above target for some time and it was appropriate to increase the cash rate target.”

With today’s intraday gains factored in, the ASX 200 is up 5.5% over 12 months.

The post ASX 200 investors flinch as RBA pulls the trigger on higher interest rates appeared first on The Motley Fool Australia.

More reading

• RBA shocks borrowers with surprise rate hike to 3.85%
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• 5 things to watch on the ASX 200 on Tuesday

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Despite the horror final week, DroneShield Ltd (ASX: DRO) shares managed to cap off a solid run in January.

In the first month of 2026, the S&P/ASX 200 Index (ASX: XJO) gained a solid 1.8%.

As for DroneShield, the ASX 200 drone defence company closed on 31 December trading for $3.08 a share. When the closing bell sounded on 30 January, shares were changing hands for $3.32 apiece.

This saw the drone defence stock up 7.8% for the month, flying ahead of the benchmark.

As for that horror final week, things were tracking far better at the close on 22 January, when DroneShield shares were trading for $4.73 each.

Amid broader weakness in growth stocks and the company scaling back its forecast sales pipeline, the share tumbled a painful 29.8% over the last week of January.

Here’s what’s been happening.

DroneShield shares rocket in first three weeks of 2026

DroneShield shares surged 53.6% in the first three weeks of January without any fresh company-specific news being released.

Investors likely had an eye on the ongoing conflict in Ukraine, alongside renewed rising tensions in the Middle East, spurred by unrest in Iran and the nation’s dubious nuclear ambitions. Drones and counter-drone technologies are increasingly being used in both conflict areas.

And in the United States, President Donald Trump caught global attention when he pushed for a US$1.5 trillion dollar defence budget in 2027. That’s up some US$500 billion from the nation’s 2026 defence budget. That’s a whole lot of zeros after those dollar signs, some of which will be allotted to drone defences.

ASX 200 defence stock takes a nosedive

DroneShield shares closed down 6.5% on 27 January, with even steeper falls over the following three trading days, following the release of the company’s December quarter update (Q4 2025).

Now, I thought the quarterly results were actually quite impressive.

Highlights included a 94% year-on-year increase in revenue to $51.3 million. And cash receipts from customers surged 142% to $63.5 million.

This helped the company achieve positive operating cash flow of $7.7 million, up from the $8.9 million loss reported for Q4 2024.

On the balance sheet, the ASX 200 defence stock had a cash balance of $210.4 million as at 31 December.

Despite these strong metrics, DroneShield shares look to have come under selling pressure after the company reduced its sales pipeline estimate to $2.1 billion, down from the prior estimate of $2.55 billion.

Europe makes up the bulk of that sales pipeline, with 66 projects valued at $1.3 billion. The US comes in at number two, with 127 projects valued at $303 million.

DroneShield CEO Oleg Vornik said the company had scaled back its previous assumptions on demand from the US civilian sector. He noted that potential customers, including airports and data centres, are still deciding how much they want to spend on drone defence.

The post How DroneShield shares soared ahead of the benchmark in January appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended DroneShield. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.