Stock market tipped to rise after electronics tariff carve-out

The local sharemarket is poised for a modest bounce after US tech heavyweights including Apple took a breather from punishing tariff wars.

Apple is among US tech stocks to benefit after the Trump administration exempted a raft of consumer electronics from import tariffs. Picture: Michael M. Santiago / Getty Images via AFP.

The local sharemarket is poised for a modest bounce on Monday morning after the Trump administration exempted a raft of consumer electronics from its punishing import tariffs – offering relief to US tech firms and partially dialling down a trade war with China.

Futures markets were pricing a rise of 0.2 per cent on the S&P/ASX 200 index at the start of trade after Wall Street’s tech-heavy Nasdaq turned up sharply on the news.

“Call it what it is – a major breather for global tech,” SPI Asset Management Head of trading and market strategy Stephen Innes said.

“The exclusions, dropped late Friday (local time) by US Customs and Border Protection, effectively shield these core products from both the 125 per cent China-specific slug and the 10 per cent baseline global tariff that was threatening to hit nearly every other country.”

Wall Street’s Nasdaq – which includes many of the world’s largest technology companies – jumped 0.8 per cent on Friday night to 16,525.28 points.

The benchmark S&P 500 index closed up 0.5 per cent at 5296.55, while the broad-based Dow Jones Industrial Average made 0.4 per cent to 39,735.69.

But expectations for volatility ahead remain elevated, as traders eye the possibility of a US recession.

Federal Reserve Bank of Boston governor Susan Collins told the Financial Times on Saturday that the US Fed “would absolutely be prepared” to deploy its firepower to stabilise financial markets if future conditions required it.

But Ms Collins added that “markets were continuing to function well”, and “we’re not seeing liquidity concerns overall”.

Meanwhile, US bonds came under pressure amid speculation that China was offloading some of its vast holdings in retaliation for Mr Trump’s measures.

Safe havens remained in demand, as the price of spot gold rose 1.9 per cent on Friday night to $US61.39 an ounce.

Oil prices rose slightly after hefty gains in the prior session, with Brent crude adding 2 per cent to $US64.76 a barrel.

In the week ahead, minutes of the Reserve Bank’s April policy meeting – due for release on Tuesday – will be pored over for clues on the trajectory of expected interest rate cuts.

Economists at ANZ and Deutsche are now forecasting 100 basis points of cuts before the end of the year, while financial markets are fully pricing in a 25bps cut at the RBA’s May board meeting.

The Australian dollar was last at US62.89c, having ended the US session around 1 per cent higher.

Originally published as Stock market tipped to rise after electronics tariff carve-out