The Australian sharemarket opened the final trading day of the week lower, with broad-based losses led by the tech sector, despite a relatively constructive session on Wall Street overnight after the US economy grew at its fastest pace in two years.
The S&P/ASX 200 was down 43.20 points, or 0.5%, to 8752.50 at 10.12am AEDT, after rallying to a 6-week high on Tuesday. The market is set to close at 2.10pm AEDT on Christmas Eve and will not reopen until December 29 due to the Christmas and Boxing Day holidays.
Yesterday, the ASX200 finished 95 points (+1.10%) higher at 8,795.7, posting a fourth consecutive gain and its highest close in six weeks as the “Santa Claus rally” strengthened. The move delivered the monthly range expansion flagged earlier this week and left the index within reach of the 8,850 year-end target outlined earlier this month.
Leading the sectors were interest-rate-sensitive areas after Wall Street strength and a less hawkish-than-feared set of RBA December minutes. Real Estate (+3.19%), Financials (+1.45%) and Energy (+1.05%) outperformed, while Utilities (+0.14%), Consumer Staples (+0.29%) and Telcos lagged.
The RBA acknowledged near-term upside risks to inflation, including the inaugural full monthly CPI release, but stressed monthly data is volatile and the new series remains too short to rely on. The Board reiterated it will prioritise quarterly inflation data, with the December-quarter CPI due January 28, just days before the February 3 RBA Board meeting.
The RBA forecasts trimmed-mean inflation of 0.8% QoQ in Q4. A result at or below that level would likely see the cash rate remain steady at 3.60%, while a print of 1.0% or higher could trigger a 25bp hike as early as February.
Rates pricing implies 9bp of tightening for February, 25bp of hikes by July and a cumulative 39bp of hikes through to the end of 2026.
US: S&P 500 tops 6,900 as rally extends to 4 sessions
US equities rose for a fourth straight session, with the S&P 500 recording its first close above 6,900 as the Santa Claus rally tightened its grip. With only a few sessions left in the year, the Nasdaq is up 21.78% YTD, the S&P 500 has gained 17.48% and the Dow Jones has added 5,898 points (+13.86%).
The advance followed a strong US Q3 GDP print of 4.3%, the fastest pace since Q3 2023 and above the 3.2% consensus forecast. Growth followed a 3.8% expansion in Q2 and was driven by firm consumer spending, strong exports and an AI-led capex surge.
The US government shutdown is expected to weigh on Q4 momentum. That tone was reinforced by CB Consumer Confidence, which fell 3.8 points to 89.1 in December from an upwardly revised 92.9 in November, marking a fifth consecutive monthly decline as views on business conditions turned negative and job/income concerns grew.
Even so, US rate-cut expectations for 2026 were little changed. Markets are pricing about 12bp of cuts for the March FOMC meeting and roughly 52bp of easing between now and end-2026.
Nvidia rose 3.01% to $189.21, extending its rebound from support at $170 and remaining on track for a 40% gain in 2025. Tesla slipped 0.64% to $485.61, extending a pullback from the $500 resistance level tested earlier in the week, but remains on track for a 20% gain in 2025 after gains of 62.5% in 2024 and 101% in 2023.
Commodities: Silver breaks $70, gold and platinum hit records; oil firms
Precious metals extended their record run.
Spot silver surged 3.49% to $71.43 an ounce, pushing through $70 for the first time, while spot gold rose 1.02% to $4,490.93 and platinum jumped about 7% to $2,269.25, with all three metals touching historic highs.
Gold stocks were mixed despite bullion touching a fresh record high of $4,497 in the Asian session.
Oil prices also finished higher as investors weighed stronger-than-expected US economic data and the prospect of sales of Venezuelan crude seized by the United States. US crude settled up 0.64% (37 cents) at $58.38 a barrel, while Brent rose 0.5% (31 cents) to $62.38 per barrel.