Markets Overview

  • ASX SPI 200 futures down 0.2% to 7,768.00
  • Dow Average down 1.7% to 39,669.39
  • Aussie up 0.4% to 0.6372 per US$
  • US 10-year yield fell 5.7bps to 4.2768%
  • Australia 3-year bond yield rose 0.9 bps to 3.35%
  • Australia 10-year bond yield fell 0.9 bps to 4.34%
  • Gold spot up 3.5% to $3,342.46
  • Brent futures up 2.0% to $65.97/bbl

Economic Events

  • 10:30: (AU) Australia to Sell A$1 Billion 66-Day Bills
  • 10:30: (AU) Australia to Sell A$1 Billion 122-Day Bills
  • 11:30: (AU) March Part Time Employment Change, prior -17,000
  • 11:30: (AU) March Full Time Employment Change, prior -35,700
  • 11:30: (AU) March Employment Change, est. 40,000, prior -52,800
  • 11:30: (AU) March Participation Rate, est. 66.9%, prior 66.8%
  • 11:30: (AU) March Unemployment Rate, est. 4.2%, prior 4.1%

Warnings from Jerome Powell that trade tensions risk undermining the Federal Reserve’s employment and inflation goals whipped up fresh volatility on Wall Street Wednesday, with stocks resuming sharp declines while haven assets like Treasuries and gold surged.

Two days of relative calm were broken as the Fed chief signaled a wait-and-see approach to President Donald Trump’s tariff offensive, pushing back on hopes he would act quickly to soothe investors. Stocks extended losses that began earlier when two big semiconductor companies reported earnings disappointments linked to the global trade war.

Asked at the Economic Club of Chicago if he envisioned a “Fed put” in which the central bank intervened to calm markets, Powell said “no,” adding that too many questions exist about the impact of Trump’s policies. “We don’t know that yet, and until we know that we can’t make informed decisions.”

The S&P 500 ended the session down 2.2%. Technology stocks took the brunt of the beating with the Nasdaq 100 tumbling 3.0% after the White House imposed new restrictions on Nvidia Corp.’s chip exports to China. The yield on 10-year Treasuries fell around five basis points to 4.28%.

For now, the Fed chief stressed, the labor market is “in a really good place,” with supply and demand falling in tandem. Powell said he expected those conditions to continue.

“Many had assumed that the Fed would prioritize the labor side of the mandate if forced to choose, but he suggested that price stability is necessary to maintain a healthy labor market,” said Adam Phillips, managing director of investments at EP Wealth Advisors.

“If you’re waiting for a Fed put, you should probably set your sights on a lower strike price as long as inflationary pressures remain elevated,” he added. “Don’t look to monetary policy for market support anytime soon.”

To Michael Bailey, director of research at FBB Capital Partners: “Powell just threw equities under the bus.”

“This has been a year of dashed hopes, first with disappointing tariffs, and now with the Fed leaving investors out in the cold,” he said. “Powell’s market snub came at a bad time with semis wreaking havoc on investor sentiment around the world.:

Earlier, Cleveland Fed President Beth Hammack took a similar stance as Powell, suggesting the Fed should hold interest rates steady until there’s more clarity on the impact of levies. Swaps traders cemented bets on policy-easing, wagering the Fed would lower interest rates a full percentage point by next January.

Nvidia sank 6.9% Wednesday after the company warned of $5.5 billion in writedowns tied to inventory and commitments for its H20 chip in the current quarter. ASML Holding NV added to the angst, reporting lower-than-expected orders.

The US government informed Nvidia on Monday that its H20 chip would require a license to export to China “for the indefinite future.” The new rules address Washington’s concerns that “the covered products may be used in, or diverted to, a supercomputer in China,” the company said in a filing.

As volatility picked up, investors turned to haven assets including gold, which set a record high as prices on the precious metal climbed above $3,340 per ounce. The Swiss franc rallied while the dollar weakened as the deepening trade tensions dented conviction in the world’s reserve currency.

Also weighing on risk assets, the World Trade organization cut its forecast for the year, saying trade would decline by 0.2% in 2025, almost three percentage points lower than it would have been without new tariffs. China was reported to be looking for a point person and more respect from the Trump administration before it will come to the table to discuss tariffs.

“While we expect that trade talks will ultimately yield progress, the brinkmanship between the US and China looks set to continue in the near term,” said Solita Marcelli at UBS Global Wealth Management.

US retail sales for March rose 1.4% — the most in two years — as Americans went on a spending spree, snapping up everything from cars to electronics, in the days leading up to President Donald Trump’s tariff announcement.