ASX 200 futures are down 25 points (-0.28%) as of 8:30 am AEST, however the Australian sharemarket traded near record highs on Thursday, as investors weighed new tariff measures introduced by US President Donald Trump, alongside expectations of an interest rate cut by the Reserve Bank of Australia (RBA) next week. The S&P/ASX 200 Index closed down by 12.3 points, or 0.1%, to 8,831.40 – marking its second-best close on record, following a high of 8,848.80 on Wednesday. Similarly, the All Ordinaries also fell by a comparable amount.
In a quiet trading session, investors rotated into interest-rate-sensitive sectors, particularly retail, as the market priced in a 100% chance of a 0.25% cut to the cash rate, expected to reach 3.6% when the RBA meets on Tuesday. Retail was the strongest sector, with JB Hi-Fi rising 1.8% to $116.41, Eagers Automotive up 2.2% to $20.60, and Wesfarmers increasing by 0.7% to $89.52.
Gold miners extended their gains as the price of the precious metal hovered near US$3,375 an ounce. Market strategist Paco Chow from Moomoo Australia noted that uncertainty surrounding Trump’s recent trade moves, including the threat of a 100% tariff on chip imports, kept investors cautious. "The steadiness in precious metals suggests investors remain risk-averse, while the calm overall tone points to traders avoiding extremes despite ongoing macro uncertainty," said Chow.
Among the gold miners, Newmont rose 1% to $104.36, Northern Star gained 1.5% to $17.39, and Westgold Resources soared 5.1% to $2.90 after announcing expectations of higher gold production between 345,000 and 385,000 ounces for the current financial year.
Dow drops on disappointing earnings
The Dow and S&P 500 dropped overnight, weighed down by disappointing earnings from Eli Lilly and Caterpillar, while the Nasdaq reached a new record closing high. This comes amid growing speculation about a major dovish shift at the Federal Reserve.
President Donald Trump announced that he would nominate Stephen Miran, Chairman of the Council of Economic Advisers, to fill the remaining term of Adriana Kugler, who resigned last week without offering a specific reason. Miran has long argued that the Trump administration’s policies on trade, immigration, and deregulation are disinflationary and supports the push for lower interest rates. He has also expressed concerns that the US dollar is overvalued due to its status as the global reserve currency and has proposed the “Mar-a-Lago Accord” to collaborate with other nations on coordinated interventions to gradually weaken the dollar—an unsettling development for US Dollar bulls.
In other news, reports indicated that Fed Governor Christopher Waller is Trump’s preferred candidate to replace current Fed Chair Jerome Powell. Waller has maintained a dovish approach to monetary policy throughout 2025, aligning with Trump’s desire for lower rates. With Waller’s tenure on the Fed Board since 2020, he could help form a dovish consensus among the Committee.
Should these appointments be confirmed, the Federal Reserve may introduce deeper and quicker rate cuts by the end of 2025, potentially shifting to a more dovish stance in 2026. The US interest rate market is already pricing in a 25 basis point cut at the September meeting, with a total of 60 basis points expected before the year’s end.
In stock news, Eli Lilly dropped 14.1% to $640.86 after disappointing results from its obesity drug trial. Intel fell 3.1% to $19.77 after Trump called for CEO Pat Gelsinger’s resignation over alleged conflicts of interest linked to ties with Chinese companies, including investments tied to the Chinese military and Communist Party. Caterpillar finished 2.5% lower at $417.12, missing EPS expectations with a $4.62 report versus $4.90, citing tariffs and geopolitical tensions that pressured margins.
Looking ahead, the data and earnings calendar is light tonight, but next week promises to be more eventful with an inflation update and earnings reports from Cisco, Deere & Company, JD.com, and Alibaba.
Asian Markets
Chinese stocks closed mixed, with the Shanghai Composite gaining 0.2% to 3,639.67, while the Shenzhen Composite fell 0.1% to 2,224.63. Hong Kong’s Hang Seng Index rose 0.7% to 25,081.63, and Japan’s Nikkei Stock Average increased 0.6% to 41,059.15. Indian shares also saw a slight uptick, with the BSE SENSEX adding 0.1% to 80,623.26.
European Markets
In Europe, the UK saw a decline, with the FTSE 100 Index down 0.7% to 9,100.77. Conversely, European shares closed higher, with Germany’s DAX gaining 1.1% to 24,192.50 and France’s CAC 40 climbing 1% to 7,709.32.