The ASX is wavering, with ASX 200 futures down 0.1% to 8,440 points at the close of US trading.
The ASX200 edged up by 1 point (0.01%) to close at 8,484 yesterday, with gains in the Industrials (+0.98%), Information Technology (+0.88%) and Telecommunications (+0.75%) sectors offsetting weakness elsewhere. Health Care (-2.94%) led the declines, followed by Energy (-0.30%) and Consumer Staples (-0.09%).
The local market resisted broader weakness in regional equities and a negative lead from US futures after US President Donald Trump signed an order imposing a flat 25% tariff on steel and aluminium imports, with no exceptions or exemptions.
“As we learned again last week, things are never set in stone when it comes to Trump’s tariffs," noted IG Markets analyst Tony Sycamore.
"Just hours after confirming the tariffs would take effect on March 4 "without exceptions or exemptions", President Trump noted he would give "great consideration" to a tariff exemption on Australian steel, citing that Australia is one of the few countries that the US has a surplus with.
“While this is potentially good news for Australia, our steel and aluminium exports to the US are only modest. The more significant risk is the uncertainty the simmering trade war brings to markets.
“The best barometer of current trade war uncertainty is gold, as it hit another fresh record high yesterday of US$2,942. Evolution Mining surged 4.89% to $6.22, Northern Star Resources added 4.04% to $18.54 and De Grey Mining added 3.88% to $2.14.
“Reporting season threw up the usual mix of winners and losers yesterday. Seven West Media surged 6.06% to $0.175, driven by a positive advertising outlook despite declining revenues and profits.
"Conversely, biotech giant CSL's share price fell 4.95% to $256.95, shaving over 20 points off the ASX200 after reporting revenues and profits that missed expectations.”
Mixed markets in the US
US markets closed mixed overnight as investors balanced Federal Reserve Chair Jerome Powell’s cautious stance on interest rates against escalating trade war concerns following US President Donald Trump’s newly imposed 25% tariffs.
“During his Senate Banking Committee testimony, Powell reiterated that the Fed did “not need to be in a hurry to adjust our policy stance”, pointing to a strong economy and inflation consistently above the 2% target,” Sycamore said.
“Powell is due to speak again tonight at the House Financial Services Committee and is expected to deliver similar guidance, assuming there aren’t any major surprises contained in the latest inflation report, which will drop 90mins earlier."
In corporate news, Apple rose 2.2% to $232.62 after announcing an artificial intelligence partnership with Alibaba.
Meanwhile, Tesla dropped 6.3% to $328.50 amid reports that a consortium led by CEO Elon Musk has offered $97 billion to acquire OpenAI. The stock’s post-election rally continues to unwind, now sitting approximately 33% below its mid-December high of $488.54.
“Looking ahead, the focus for tonight's session will be on the January inflation report. In December, US headline CPI increased by 0.4% MoM, the most since March, which saw the annual rate rise to 2.9% YoY from 2.7% prior," Sycamore noted.
"Core CPI increased by 0.2% MoM, which saw the annual rate of core inflation ease to 3.2% from 3.3%.
“Both headline and core inflation are expected to rise by 0.3% MoM in January, supporting the expectation that the Fed will keep rates on hold until the middle of this year. The rates market is pricing in 35bp of Fed rate cuts for 2025, down from 49bp this time last week.”
Record highs in Europe
European sharemarkets closed at record highs on Tuesday as investors assessed the European Union’s response to US President Donald Trump's decision to impose tariffs on all steel and aluminium imports.
The move led to a 1.9% decline in basic resources stocks with ArcelorMittal and Voestalpine falling 1.9% and 0.9%, respectively, while Thyssenkrupp dropped 3.9%. In contrast, bank stocks rose 1.3%, leading sectoral gains.
- The continent-wide FTSEurofirst 300 index edged up 0.3%.
- The UK FTSE 100 index in London gained 0.1%.
Currencies and commodities
Currencies
Currencies saw mixed movements against the US dollar in European and US trade. The euro strengthened from US$1.0300 to US$1.0373 and was near US$1.0360 at the US close.
- The Australian dollar advanced from US62.68 cents to US62.99 cents, hovering near US62.95 cents at the close.
- The Japanese yen weakened from 151.66 per US dollar to JPY152.59, settling near JPY152.55 at the close.
Commodities
Global oil prices extended gains for a third consecutive session as sanctions heightened concerns over Russian and Iranian supply, outweighing fears that rising tariffs could drive inflation and slow economic growth.
- Brent crude rose US$1.13, or 1.5%, to US$77.00 per barrel.
- US Nymex crude climbed US$1.00, or 1.4%, to US$73.32 per barrel.
Base metal prices declined amid fears that new US tariffs could weigh on economic growth and reduce demand.
- Copper futures slid 2.3%, while aluminium futures dropped 0.6%.
- Gold futures eased by US$1.80, or 0.1%, to US$2,932.60 per ounce as investors took profits following a record high. Spot gold traded near US$2,898 at the US close after peaking at US$2,942.70 earlier in the session.
- Iron ore futures fell US65 cents, or 0.6%, to US$106.32 per tonne as concerns over US trade policies outweighed supply disruptions in Australia due to adverse weather conditions.
What about small caps?
The S&P/ASX Small Ordinaries gained 0.21% to finish at 3,220.10 yesterday. Over the past five days, it has climbed 1.56%.
It has been a slow start to the door on the news front, but you can read about the following and more throughout the day.
- Percheron Therapeutics Ltd, an international biotechnology company focused on developing novel therapies for rare diseases, has provided an update on its partnering activities following the negative outcome of its Phase IIb clinical trial of ATL1102 in Duchenne muscular dystrophy in December 2024.
- AuKing Mining Ltd has outlined its proposed activities for the Cloncurry Gold Project in north-western Queensland, following two key developments: The signing of a binding MoU between AuKing, Orion Resources Pty Ltd, and Tick Hill Mining Pty Ltd, the current owner of the Tick Hill gold mine. The commencement of a private A$2 million note raising with GBA Capital to support Orion’s proposed acquisition of the Cloncurry Project and conduct project development studies in anticipation of completing the transaction.
- St George Mining Ltd has entered into a binding MoU with Xinhai to establish a framework for collaboration on the development of the advanced, high-grade Araxá niobium-rare earth elements (REE) project in Minas Gerais, Brazil.
- Brightstar Resources Ltd has executed a binding Term Sheet with Cazaly Ltd, granting Cazaly the option to earn up to an 80% interest in the Goongarrie Gold Project by incurring up to A$3 million in exploration expenditure.
- FireFly Metals Ltd has announced further exceptional drilling results at the Green Bay Copper-Gold Project, reinforcing the potential for continued mineral resource growth. The current resource estimate stands at 24.4 million tonnes (Mt) at 1.9% copper equivalent (CuEq) in the measured and indicated (M&I) category and 34.5Mt at 2.0% CuEq in the inferred category.