ASX Lunch Wrap: ASX crumbles 2pc after Powell triggers brutal sell-off on Wall Street

The ASX plunged nearly 2pc earlier, as a brutal Wall Street sell-off followed the Fed’s cautious outlook, signalling just two rate cuts for 2025.

Cake and bleat it: Wall Street slumped after Jerome Powell opened his mouth. Picture via Getty Images

• ASX drops almost 2pc after big Wall Street sell-off

• Fed signals just two rate cuts in 2025

• Megaport, Block Inc hit hard; Patriot Battery Metals rallies

The ASX crashed on Thursday morning, with the S&P/ASX 200 benchmark dropping close to 2% within the first hour of trade. 

This followed a particularly brutal session on Wall Street, where the major indices plummeted in response to the US Federal Reserve’s latest outlook on interest rates.

The Fed cut its rates by 25 basis points, as expected, but signalled only two rate reductions for 2025, dampening the market's mood.

And, at the tail end of last night’s press conference, a reporter threw Chair Jerome Powell a curveball: could the Fed rule out hiking rates next year?

You might have expected Powell to close the door on that idea. After all, US inflation is just a whisker above the Fed’s 2% target. 

But his response was “You don’t rule things completely in or out in this world.”

The comments left investors scrambling for the exit – the S&P 500, the Nasdaq, and the Dow Jones all dropped by around 3% each. 

“The next question is, how long will this sell-off go for?” said momoo’s Jessica Amir.

“We expect traders to be selective and perhaps buy the dip, which we're starting to see after hours. Some traders believe they can scoop up bargains at these levels.”

The ASX didn’t escape the fallout this morning, with all 11 sectors in the red by 12:30pm AEDT. 

Tech and financials were hit particularly hard, while the Aussie dollar sank over 1% to hover just above US62 cents.

Source: Market Index

Source: Market Index

In the larger end of town, Mesoblast (ASX:MSB) stole the spotlight as its Ryoncil (remestemcel-L) became the first-ever FDA-approved mesenchymal stromal cell (MSC) therapy, now the go-to treatment for children aged 2 months and older with steroid-refractory acute graft versus host disease (SR-aGvHD). 

The therapy showed a 70% response rate in its phase III trial. Mesoblast’s shares surged by 35%. 

Shares in Patriot Battery Metals (ASX:PMT) also jumped  14% after Volkswagen invested C$69 million to secure a 9.9% stake in the lithium miner, locking in a long-term supply of critical materials for its electric vehicle batteries. 

Now read: Carmakers power dreams of lithium revival as Patriot nabs C$69mn Volkswagen deal

Meanwhile, Megaport (ASX:MP1), the data centre giant, was hit hardest, falling 6.5%; while financial heavyweight Block Inc (ASX:SQ2) tumbled by 5%. 

AGL Energy (ASX:AGL) also dropped 3% after being hit with a $25 million fine by the courts. The penalty stemmed from AGL’s failure to notify and refund around 500 customers on time. 

ASX SMALL CAP WINNERS

Here are the best performing ASX small cap stocks for December 19 :

Security	Description	Last	%	Volume	MktCap
AYM	Australia United Min	0.004	100%	977,360	$3,685,155
AMD	Arrow Minerals	0.002	50%	3,118,346	$13,223,628
IBG	Ironbark Zinc Ltd	0.003	50%	2,047,671	$3,667,296
BDG	Black Dragon Gold	0.036	44%	2,821,386	$7,547,068
OBL	Omni Bridgeway Ltd	1.385	44%	1,296,533	$272,693,739
NRZ	Neurizer Ltd	0.002	33%	4,105,000	$4,226,791
AKN	Auking Mining Ltd	0.005	25%	100,083	$1,565,401
T3D	333D Limited	0.010	25%	2,008	$1,409,468
TMK	TMK Energy Limited	0.003	25%	1,586,000	$18,651,130
DCC	Digitalx Limited	0.067	24%	39,991,599	$46,785,818
YOJ	Yojee Limited	0.150	20%	123,413	$34,450,482
LNR	Lanthanein Resources	0.003	20%	1,000,000	$6,109,090
CDR	Codrus Minerals Ltd	0.019	19%	20,000	$2,646,200
CU6	Clarity Pharma	5.410	17%	1,913,339	$1,478,162,446
ICL	Iceni Gold	0.075	17%	3,915,853	$17,753,908
RVT	Richmond Vanadium	0.245	17%	13,056	$18,103,639
BUY	Bounty Oil & Gas NL	0.004	17%	166,666	$4,495,503
OSL	Oncosil Medical	0.007	17%	6,600,000	$27,639,481
PAB	Patrys Limited	0.004	17%	250,000	$6,172,342
RGL	Riversgold	0.004	17%	732,398	$4,882,388
WBE	Whitebark Energy	0.007	17%	424,872	$1,514,001

Cosmos Exploration (ASX:C1X) has secured an exclusive option to acquire EAU Lithium, a company focused on Bolivia’s Lithium Triangle. EAU has partnered with Bolivia’s state-owned lithium group, Yacimientos de Litio Bolivianos, to test lithium brines from key salars using Vulcan Energy Resources (ASX:VUL)’s Direct Lithium Extraction (DLE) technology. If successful, Cosmos said this could help unlock Bolivia’s vast lithium resources.

Revaia has agreed to merge with RegenCo in an all-scrip deal, valuing Revaia at $24 million. Following the merger, Revaia's shareholders will own 32% of RegenCo, which will become one of Australia's leading independent carbon project developers, with a combined annual production of 450,000 Australian Carbon Credit Units (ACCUs). Powerhouse Ventures (ASX:PVL), which holds an investment in Revaia, will increase its stake with an additional $250,000. 

ASX SMALL CAP LOSERS

Here are the worst performing ASX small cap stocks for December 19 :

Code	Name	Price	% Change	Volume	Market Cap
PER	Percheron	0.008	-86%	238,879,649	$64,158,820
NTD	Ntaw Holdings Ltd	0.225	-42%	1,371,570	$64,567,430
MTL	Mantle Minerals Ltd	0.001	-33%	167,650	$9,296,169
PKO	Peako Limited	0.002	-33%	500,000	$3,285,425
TD1	Tali Digital Limited	0.001	-33%	1,380,000	$4,942,733
TKL	Traka Resources	0.001	-33%	12,450	$2,963,488
PGY	Pilot Energy Ltd	0.007	-30%	28,873,580	$16,420,716
CRR	Critical Resources	0.005	-29%	11,462,290	$17,023,742
1TT	Thrive Tribe Tech	0.002	-25%	256,064	$1,406,723
88E	88 Energy Ltd	0.002	-25%	1,510,910	$57,867,624
CR9	Corellares	0.003	-25%	1,023,116	$1,860,370
LNU	Linius Tech Limited	0.002	-25%	300,000	$12,302,431
TX3	Trinex Minerals Ltd	0.002	-25%	21,989	$3,657,305
VRC	Volt Resources Ltd	0.003	-25%	6,796,333	$16,634,713
ERG	Eneco Refresh Ltd	0.010	-23%	80,000	$3,540,659
FHS	Freehill Mining Ltd.	0.004	-20%	2,450,235	$15,392,639
AUK	Aumake Limited	0.005	-17%	9,425	$18,064,153
AUR	Auris Minerals Ltd	0.005	-17%	8,592	$2,859,756
BLZ	Blaze Minerals Ltd	0.005	-17%	2,461,618	$9,401,687
ECT	Env Clean Tech Ltd.	0.003	-17%	3,198,507	$9,515,431
RNX	Renegade Exploration	0.005	-17%	400,000	$7,704,021
VML	Vital Metals Limited	0.003	-17%	1,415,615	$17,685,201
BMR	Ballymore Resources	0.130	-16%	217,709	$27,393,241

Deep Yellow (ASX:DYL) 's share price dropped after the company delayed its Final Investment Decision (FID) for the Tumas Uranium Project until March 2025, citing issues with delayed costings. While early works continue, the final plant construction depends on securing better pricing incentives for the greenfield project.

Originally published as ASX Lunch Wrap: ASX crumbles 2pc after Powell triggers brutal sell-off on Wall Street