Markets Overview
- ASX SPI 200 futures down 0.4% to 8,134.00
- Dow Average down 0.9% to 40,829.00
- Aussie up 0.4% to 0.6494 per US$
- US 10-year yield fell 4.8bps to 4.2965%
- Australia 3-year bond yield rose 3.8 bps to 3.43%
- Australia 10-year bond yield rose 6.3 bps to 4.33%
- Gold spot up 2.9% to $3,430.75
- Brent futures up 3.0% to $62.03/bbl
Economic Events
- 11:00: (AU) Australia to Sell A$1 Billion 3.75% 2037 Bonds
- 16:30: (AU) April Foreign Reserves, prior A$105.2b
Wall Street’s risk-off mode prevailed in the run-up to the Federal Reserve decision, with stocks falling and bonds rising as President Donald Trump’s tariff remarks failed to ease worries that his trade war will cause economic damage.
After almost wiping out losses, the S&P 500 closed with a drop of nearly 1%. Trump said he would prescribe tariff levels and concessions for partners looking to avoid higher duties, appearing to move away from the idea that he would engage in back-and-forth negotiations. Trade jitters spurred gains in Treasuries, which also climbed after a solid $42 billion sale of 10-year bonds.
Trump’s latest comments indicate he could continue to change his approach, roiling financial markets that have struggled amid concerns about the economic implications of his tariff policy. In the absence of any significant breakthroughs, investors were quick to dismiss Treasury Secretary Scott Bessent’s signals that negotiations with several commercial partners are going well.
Just a day ahead of the Fed decision, traders widely expect policymakers to stay on hold. While Trump has been ratcheting up pressure on the central bank to resume cutting rates, officials have mostly emphasized a need to wait and see how trade policies implemented last month affect the economy.
“And if traders wish to believe that the Fed will come to the rescue of the world tomorrow and assuage the recent rise in policy uncertainty and political uncertainty with a signal of overt ‘dovishness’, they should think again,” said Thierry Wizman at Macquarie.
The S&P 500 fell 0.8%. The Nasdaq 100 slid 0.9%. The Dow Jones Industrial Average dropped 0.9%. In late hours, Marvell Technology Inc. sank as the chipmaker cut the high end of its revenue forecast and postponed an investor day event, citing the “uncertain” economy. Advanced Micro Devices Inc. gave a strong revenue projection. Super Micro Computer Inc.’s outlook fell short of estimates.
The yield on 10-year Treasuries declines four basis points to 4.31%. The Bloomberg Dollar Spot Index slipped 0.3%.
