The ASX is expected to fall slightly on open following gyrations on Wall Street as President Donald Trump’s fast-evolving tariff war with top trade partners shows little signs of abating.
Market futures are pointing to a 2 point downward shift on the local bourse of 0.3 per cent after it closed slightly higher on Tuesday, up 0.2 per cent at 7761.7 points. The Australian dollar has also strengthened slightly, to 63.48 US cent.
Trump called on China to reach out to him to kick off negotiations, indicating no end in sight to fight that has seen both sides raise trade barriers.Credit: Bloomberg
On Wall Street, the whipsaw in trading showed little signs of abating, with investors unwilling to take on too much risk after a two-day rally.
That’s even as results from Wall Street’s financial heavyweights underscored an equity-trading boon and still-healthy consumers and businesses. After climbing almost 1 per cent, the S&P 500 finished lower. In late hours, United Airlines Holdings stood by its full-year profit outlook, but warned a “recessionary” scenario would erode demand and dramatically lower earnings.
Bonds rose as a Treasury official said a rule change was under consideration that could lower trading costs for banks. The dollar snapped a five-day slide.
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Trump called on China to reach out to him to kick off negotiations, indicating no end in sight to fight that has seen both sides raise trade barriers. The Asian nation ordered airlines not to take further deliveries of Boeing jets, according to people familiar with the matter. Meantime, the European Union and US made scant progress bridging trade differences.
“We would advise investors to avoid making hard and fast assumptions about how tariff developments will ultimately play out in the economy and on corporate profits,” said Anthony Saglimbene at Ameriprise. “Instead, we suggest investors prepare for a range of possible intermediate-term outcomes that include slow-to-positive economic and profit growth, and scenarios of slow-to-negative growth.”
High uncertainty surrounding US trade policy and a spike in financial-market volatility has unsettled global investors over the past few weeks. Sentiment regarding economic prospects is the most negative in three decades, yet fund managers’ pessimism isn’t fully reflected in their asset allocation which could mean more losses for US stocks, a Bank of America Corp. survey shows.
