Things are looking much better for Australian stocks this morning – they’re expected to rebound, after a shocking day yesterday of the sort not seen since COVID-19 ravaged the markets.
Not so for our friends in the US, as they try to anticipate the next move in their president’s trade war, which promises at best uncertainty and rising inflation and at worst, a recession.
China and US lock horns
Trump upped the stakes with China yesterday, threatening to raise the tariff on the country’s giant Asian trading partner to 50% if it didn’t lift retaliatory tariffs it slapped on the US in response to this tango Trump alone started.
A brief rally on reports of a tariff pause for non-China partners was later dashed by a White House denial.
Investors read the tea leaves and fled to safe-haven assets.
The Dow Jones fell 349 points or 0.9% to 37,965.60 after swinging between a gain of 892 points and a loss of 1,703 points during the session.
The S&P 500 dipped 0.2% to 5,062.25, while the Nasdaq edged up 0.1% to 15,603.26, buoyed by gains in semiconductor stocks including Nvidia (+3.5%) and Super Micro Computer (+10.7%).
Apple shares slid 3.7% on concerns over new Chinese tariffs.
In Europe, the FTSEurofirst 300 plunged 4.6%, its worst one-day drop in over a year, while the UK FTSE 100 fell 4.4%.
European banks enter bear market
European banks are officially in bear market territory, down more than 20% from March highs.
In commodities, Brent crude tumbled 2.1% to US$64.21 per barrel, its lowest close since April 2021.
Gold futures retreated 2% to US$2,973.60 an ounce as investors favoured the US dollar. Iron ore dropped 1.7% to US$100.85 per tonne.
Yields rose sharply, with the US 10-year Treasury yield up 21 basis points to 4.20%. The Australian 10-year yield climbed 19 basis points to 4.28%.
The Australian dollar weakened to US$0.5976. ASX200 futures rose 55 points or 0.7%, signalling a potentially positive start despite global jitters.
Market snapshot
- ASX 200 futures: +0.8% to 7,392 points
- Australian dollar: Flat at 59.88 US cents
- S&P 500: -0.2% to 5,062 points
- Nasdaq: Flat at 15,602 points
- FTSE: -4.4% to 7,702 points
- EuroStoxx: -4.5% to 474 points
- Spot gold: Flat at $US2,982/ounce
- Brent crude: -2% to $US64.30/barrel
- Iron ore: -2.5% to $US98.15 a tonne
- Bitcoin: +0.4% to $US79,202
Source: ABC