Australian shares are expected to open lower today, because Wall Street has again been spooked by the latest round of trade tariffs suggested by the current administration in the US.
US shares slump across the board
All three major US indices closed in the red, with the S&P falling 0.3%, the Nasdaq losing 0.6%, and the Dow Jones dropping 0.4%.
Unsurprisingly, the declines were led by the automotive sector, where shares of General Motors fell more than 7% and Ford lost 3.9%, on the back of worries about the impact of new tariffs on US-made vehicles.
Accordingly, car parts manufacturers Aptiv and BorgWarner also slumped, each shedding around 5%.
On the other hand, Tesla shares moved up slightly, by 0.4%, perhaps because investors viewed the electric vehicle company as less exposed to the potential effects of the new trade measures.
European sharemarkets also fell yesterday – they’re alert to the threat of the trade tariffs.
The continent-wide FTSEurofirst 300 index slipped 0.4%, while London’s FTSE 100 eased 0.3%.
European automakers were among the hardest hit, with German stocks leading losses.
Shares in Porsche pared back early declines but still closed 2.6% lower, while Mercedes and BMW fell 2.7% and 2.5% respectively. Volkswagen shed 1.5%. In France, Stellantis—manufacturer of brands including Jeep and Citroën—dropped 4.3%.
Currencies and commodities
The Euro strengthened against the greenback to US$1.0799, and the Australian dollar advanced to 63.02 US cents. The Japanese yen, however, weakened slightly to JPY151.05 per US dollar.
Oil prices continued to firm, reaching one-month highs. Brent crude rose 0.3% to US$74.03 per barrel, while US Nymex crude climbed 0.4% to US$69.92.
The gains followed a larger-than-expected drop in US inventories and ongoing geopolitical pressures involving Iran and Venezuela.
Base metals slipped despite a weaker US dollar. Copper futures fell 2.3% and aluminium dropped 2.2%, as investors focused on the threat of reduced industrial demand linked to tariff risks. Gold, by contrast, gained 1.5% to US$3,069.10 per ounce, nearing record highs, with investors adopting a defensive stance. Iron ore futures edged up 0.1% to US$102.36 a tonne.
Budget talk back home
Back home, politics are also in focus following Opposition Leader Peter Dutton’s budget reply speech delivered last night in Canberra.
In a pre-election pitch, Dutton pledged expanded tax relief for small businesses, including increasing the instant asset write-off threshold to A$30,000 and introducing a new A$20,000 annual deduction for business-related meal expenses.
Dutton also outlined plans to scrap several of the Albanese government’s flagship programs, including the A$20 billion Rewiring the Nation fund, the A$10 billion Housing Australia Future Fund and A$16 billion in production tax credits for critical minerals and green hydrogen.
He also proposed cutting 41,000 public service roles and committed to boosting apprenticeship numbers through A$12,000 employer incentives.
The electioneering is ramping up, and it will be worth keeping an eye on Albo for any movement on a date for the contest, which he is expected to announce as early as today.
Market snapshot
- ASX200 Futures: -21 points
- Australian dollar: +0.06% at 63.02 US cents
- S&P 500: -0.33% to 5,693 points
- Nasdaq: -0.59% to 19,798 points
- Dow Jones: -0.37% to 42,299 points
- FTSE 100: -0.27% to 8,666 points
- EuroStoxx: -0.7% to 546 points
- Spot gold: +1.2% to $US3,055/ounce
- Brent crude: +0.01% to $US75.46/barrel
- Iron ore: $US102.25/tonne
- Bitcoin: -0.35% to $US86,971
Source: ABC