The Australian sharemarket is headed for a reprieve on Thursday morning following a late rally on Wall Street after President Donald Trump granted a one-month exemption on his stiff new tariffs on imports from Mexico and Canada for US carmakers.
ASX futures turned positive shortly after 6am AEDT and were up 17 points, or 0.2 per cent, at 8129 as of 6.47am AEDT. The likely market rebound comes after a sell-off over the past two sessions amid worries an escalating trade war will be hurting global growth and company earnings.
The Australian dollar was up 1.1 per cent at 63.40 US cents as of 6.37am AEDT. Oil and iron prices both declined overnight as Trump’s tariffs on America’s biggest trading partners weighed on the outlook for commodities demand.
It’s been a roller coaster on the New York Stock Exchange since Trump’s new tariffs against Canada, Mexico and China kicked in.Credit: Bloomberg
The cautious optimism on the local exchange comes after Wall Street’s main indexes rose in choppy trading overnight, as investors hoped for a delay in US auto tariffs on its top trading partners. The tepid gains turned into a rally after a one-month exemption was confirmed late in the session, sending the S&P 500 up 1.1 per cent as of 6.38am AEDT. The Dow Industrial Average climbed 1.3 per cent, and the Nasdaq Composite jumped 1.5 per cent.
“We are on the tariff roller coaster,” Wasif Latif, chief investment officer at Sarmaya Partners in New Jersey. “The economic data, the Fed, and all that stuff seems to have been pushed to the background for now. It’s just a reminder how these policies have an impact in the long run and the markets are reacting to it.”
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Trump is giving a one-month exemption on his stiff new tariffs on imports from Mexico and Canada for US automakers, amid fears that the trade war could harm US manufacturers.
The announcement came after Trump spoke with leaders of the “big 3” automakers, Ford, General Motors, and Stellantis. Trump also said he told the car bosses they should move production to the US from Canada and Mexico, said White House press secretary Karoline Leavitt.
The carmakers’ shares advanced, with Ford trading 5.3 per cent stronger, General Motors jumping 7.6 per cent, Stellantis up 4.5 per cent and Elon Musk’s Tesla rising 1.6 per cent.
