ASX 200 flat before major US Federal Reserve decision, Aussie dollar falls 0.29 per cent

The ASX 200 traded slightly down ahead of a major decision by the US Federal Reserve, just after the market hit a four-day high.

The Australian market traded sideways during Wednesday’s trading, as investors await the next rate cut decision out of the United States.

After hitting a four-day high of 8342.9, the benchmark S & P/ASX 200 index closed down just 4.6 points or 0.06 per cent at 8309.4.

The four-day high suggests the Santa Claus rally is on after the index ended a five-day losing streak on Tuesday.

The ASX trade flat on Wednesday as investors wait for key Federal Reserve decision. Picture NewsWire/ Gaye Gerard.

The broader All Ordinaries traded flat, remaining at 8,558.60 points after Wednesday’s trading.

The Australian dollar fell 0.29 per cent and is trading at 63.18 US cents

On a mixed day for the market, 6 of the 11 sectors traded higher, with industrials leading the way growing by 0.77 per cent.

The best performing stock was former market darling Zip, which is up 7.21 per cent after Wednesday’s trading.

It was also a strong day for Megaport and SiteMinder, up 5.84 and 3.65 per cent respectively.

The big four banks had a mixed day, with three of the four falling during Wednesday’s session. Australia’s largest bank CBA is trading down 0.87 per cent to $159.73, ANZ also fell 0.52 and

NAB shares are down 0.20 per cent following its annual general meeting, while Westpac is the only major bank which rose, up 0.64 per to $32.85.

The best performing stocks on Wednesday were Zip and Megaport. Picture: NewsWire / Max Mason-Hubers

Shares in Transurban rose 1.9 per cent, CSL gained 1.2 per cent and WiseTech rose 1.1 per cent.

Australia’s market followed weakness out of Wall Street. The Dow fell 0.61 per cent during trading overnight, extending its losing streak to nine-days, its longest streak 1978. The broader S & P 500 fell 0.39 per cent and the tech-heavy Nasdaq fell 0.32 per cent.

According to Capital.com’s senior financial market analyst Kyle Rodda, markets are waiting to see what the Federal Reserve will do when it meets overnight Australian time.

“The ASX200 hit an air pocket in the afternoon and gave up an early gain, with similar turbulence seen in other Asian indices. The markets are treading water and cautiously awaiting tomorrow morning’s Federal Open Market Committee decision,” Mr Rodda said.

“As will be the case with US equities, the decision, and, more importantly, the guidance and projections will probably determine whether global stocks rally into the new year, or fade from the highs.”

Mr Rodda says markets are predicting further rate reductions following the Federal Reserve’s meeting overnight.

“The Federal Reserve is poised to deliver a 25 basis-point rate cut tonight, however, uncertainty looms over the Fed’s 2025 policy trajectory, with markets weighing the possibility of a January pause,” he said.

“Traders expect another 50 basis points of cuts next year, though persistent inflation risks could challenge that view, especially in light of looser fiscal settings under a Trump administration.”

Originally published as ASX 200 flat before major US Federal Reserve decision, Aussie dollar falls 0.29 per cent