The Australian sharemarket is poised for a modest rebound on Friday, with ASX 200 futures up 22 points (0.26%) at 8:30 am AEST. This follows a 0.5% decline on Thursday as investors weighed concerns over US fiscal policy and bond market volatility.
Investor sentiment remains cautious as markets digest the implications of the US House of Representatives passing President Trump’s expansive tax-and-spending bill, which threatens to add trillions in US debt. The bill now moves to the Senate, where some Republicans are seeking even more tax cuts.
ASX and small caps
The ASX 200 snapped a three-day winning streak on Thursday to close at 8,349. While the market was in the red for much of the session, a late rebound in energy and consumer staples helped trim earlier losses. Tech and healthcare stocks were among the worst performers.
In corporate news, Myer Holdings Ltd provided a trading update, reporting a 1.5% increase in total sales for the third quarter, driven by strong online performance. However, the company noted challenges in its brick-and-mortar stores due to reduced foot traffic.
Bendigo and Adelaide Bank Ltd announced a net profit after tax of $500 million for the first half of the fiscal year, up 3% year-on-year. The bank attributed the growth to improved net interest margins and cost management initiatives.
And, following the Thursday market close, Rio Tinto announced CEO Jakob Stausholm would be stepping down later this year, with a search for his replacement under way.
In small caps action, Future Battery Minerals Ltd announced the acquisition of all remaining mineral rights at its Miriam Project in Western Australia. The deal, valued at $350,000 and secured from Corazon Mining, grants FBM full control over gold, base metals, and residual lithium interests across the tenement.
Wall Street ends mixed amid fiscal concerns
Overnight, US equity markets were mixed but closed around breakeven, with the S&P 500 down 0.04% to 5,842 after losing momentum late in the session. The Dow Jones Industrial Average was unchanged at 41,859, while the Nasdaq Composite increased 0.28% to 18,926.
The Nasdaq’s gains were driven by strength in the technology sector, while the broader market remained subdued due to investor apprehension over the potential economic impact of the new tax legislation and rising national debt levels.
US Treasury yields eased slightly, with the 10-year yield falling to a (still high) 4.53% after a weak 20-year note auction on Thursday. The market has priced out more than 50 basis points of Federal Reserve rate cuts in recent weeks.
Commodities and currencies
Gold prices eased back below US$3,300 overnight, falling 0.6% to $3,295 an ounce, as the US dollar strengthened and investors took profits after prices briefly reached a two-week high.
Oil prices declined amid reports that OPEC+ is considering a third consecutive production increase in July, potentially adding 411,000 barrels per day to global supply.
The Australian dollar weakened against the US dollar, trading at 0.6412. The euro fell to near US$1.1280, and the Japanese yen eased slightly.
Base metals were mixed amid continuing uncertainty over economic conditions and demand growth, particularly in the US and China. Copper futures were up 0.2%, while aluminium futures lost 1%.
Looking ahead
In what looks likely to be a quiet session, investors will be closely monitoring developments around Trump’s “Big, Beautiful Bill” as it heads to the US Senate, as well as upcoming data releases, including Japanese inflation data and US home sales figures.
Metro Mining and Syrah Resources both host annual general meetings today.