ASX Down Amid Inflation and Recession Fears

The ASX is back in the red, falling 0.2% for the week after three consecutive weeks of gains. As usual, markets were focused on the uncertainty around the Middle East, with the US-Iran ceasefire and the reopening of the Strait of Hormuz proving difficult to pin down. Back home, Goldman Sachs analysts are predicting two further rate hikes this year to combat inflation, recession risk now sitting at a 25% chance of occurring in the next 12 months.

This week’s best performers

Sunrise Energy Metals Limited (ASX:SRL) +26.63%

Despite being the best performer on the ASX 200 this week, the critical mineral developer had no firm-specific news to drive its stock price - yet its share price has risen over 2,500% over the past year. The company's appeal lies in its scandium deposit in central-west NSW - a largely unknown critical mineral with major potential in aerospace, defence and 5G infrastructure. Already backed by US defence manufacturer, Lockheed Martin, Sunrise Energy Metals is definitely one to watch.

Zip Co Ltd. (ASX:ZIP) +26.29%

Zip had an impressive week after delivering record quarterly earnings with cash earnings of $65.1m - up 41.5% compared to last year's Q3 earnings report. US revenue jumped 43.3% compared to Q3 2025, proving the importance of accessing the North American market. The buy now, pay later stock is still down 30% for 2026, but results like this make a recovery look increasingly plausible.

WiseTech Global Ltd. (ASX:WTC) +22.72%

WiseTech investors enjoyed a sharp price rebound after a disappointing 2026 so far with the stock down over 30% for the year, mainly driven by the broader Australian tech/software sell-off. WiseTech appears to be benefitting from improved risk sentiment across the market as global tensions show signs of easing.

This week’s worst performers

4DMedical Ltd. (ASX:4DX) -14.12%

Again. 4DMedical makes the losers list for the fourth week in a row. After receiving certification to commence operations with healthcare providers in the EU, the medical technology company has surged over 40% in the past month. This week's selloff looks like investors taking a profit off those gains. With the stock still up enormously over the past year (over 2000%!) and now expanding into Europe, it remains one to watch.

Downer EDI Limited (ASX:DOW) -10.48%

One of Australia's largest infrastructure services companies had a tough week and was ultimately dragged down by macro pressures. With 90% of their work government-related, Downer is heavily exposed to any pullback in public spending, as rising interest and recession fears could put pressure on government budgets.

Reece Limited (ASX:REH) -10.43%

Reece fell sharply this week as growing fears around interest rates dampened investor sentiment towards housing and construction-linked stocks. Closely tied to residential building and renovation activity in Australia and the US, investors are remaining cautious - especially after Goldman Sachs doubled its recession probability estimate.