ASX steadies despite weak volumes and sector pressure
The S&P/ASX 200 was modestly higher in early trade, up 14.30 points or 0.16% at 8,740, despite slipping below its 50-day moving average. DroneShield and Temple & Webster were among the early leaders, rising 4.79% and 3.07% respectively. Even so, the index remains under pressure, down 0.63% over the past five sessions and sitting 4.12% below its 52-week high.
That followed a softer session on Monday, when the ASX200 fell 37 points or 0.42% to 8,725.7 on volumes roughly half the 30-day average, reflecting reduced year-end participation. IT (-1.05%), Energy (-0.78%) and Industrials (-0.63%) led the declines, while Health Care (+0.19%) and Consumer Staples (-0.10%) outperformed the broader market.
Technology stocks weighed heavily, with DroneShield sliding 4.86% to $3.13, Technology One falling 2.70% to $27.79 and WiseTech Global down 1.02% to $68.07. Energy names also softened after crude oil dropped 2.52% overnight, with Amplitude Energy down 2.74%, Viva Energy off 1.90% and Santos lower by 1.50%.
Wall Street pauses near highs as investors await Fed guidance
US equity markets closed lower overnight as investors moved to the sidelines ahead of year-end and the release of minutes from the Federal Reserve’s December meeting. The Dow Jones Industrial Average fell 249 points or 0.5% to 48,462, while the S&P 500 declined 0.4% and the Nasdaq composite slipped 0.5%. Small caps lagged, with the Russell 2000 down 0.6%.
Despite the pullback, US equities remain firmly positive for 2025. The S&P 500 is up close to 18% for the year, the Dow has gained more than 14%, and the Nasdaq continues to lead with gains exceeding 21%.
Mega-cap technology stocks weighed on sentiment. Tesla fell 3.27% to $459.64 after breaking below key technical support, extending its retreat from last week’s $498.83 record high. Nvidia and Oracle also traded lower, contributing to the cautious tone.
Markets are now focused on the release of FOMC minutes from the December 10 meeting, where policymakers delivered a 25bp rate cut to a 3.50%–3.75% target range. Investors will look for insight into the divided vote and how officials are balancing inflation risks against signs of labour market cooling.
Precious metals reverse sharply after record highs
Volatility surged across precious metals after a sharp reversal from record highs in thin year-end trading. Silver plunged more than 10% after briefly surging above $84 an ounce, while gold fell more than 4% and platinum dropped nearly 14%, marking one of its steepest intraday declines in years.
The sell-off dragged local gold stocks lower, with Resolute Mining down 2.33%, Capricorn Metals off 1.77% and Northern Star Resources easing 0.74%.
Elsewhere in commodities, oil prices rebounded, with Brent crude rising 1.8% to $61.75 a barrel, while iron ore gained 1.3% to $106.05 a tonne. Copper prices remained firm on supply deficit concerns, providing some support for miners in offshore markets despite broader equity weakness.
While the precious metals pullback was abrupt, broader structural drivers across silver, copper, lithium and rare earths remain intact, leaving Australian commodity exposure well positioned should demand trends reassert themselves into 2026.
Australian dollar softens as rate expectations stay finely balanced
The Australian dollar eased 0.3% to US66.93¢ amid softer risk sentiment and heightened commodity volatility. Bitcoin also edged lower, down 0.4% to $US87,137.
Bond markets were little changed, with the US 10-year Treasury yield at 4.11% and the Australian 10-year yield at 4.75%. Volatility ticked higher, with the VIX up 0.59 points to 14.19.
With domestic data light for the remainder of the holiday-shortened week, attention will soon shift to Australian inflation figures in early January and key US labour market releases next week, both of which will be central to shaping interest rate expectations for early 2026.