ASX resumes slide after tech stocks weigh down Wall Street

Welcome to your five-minute recap of the trading day.

The numbers

The Australian sharemarket slumped back into the red on Wednesday after a three-day reprieve, with investors taking a risk-off approach again following another volatile trading session in the US overnight.

The S&P/ASX 200 Index fell by 32.1 points, or 0.4 per cent, to 7,828.30 points, with eight of the 11 industry sector finishing down, led by real estate stocks, tech firms and utilities.

The Australian dollar was trading at 63.59 US cents.

Wall Street continues to be volatile.Credit: AP

The lifters

While the big four banks struggled, with the nation’s biggest lender CBA down 1 per cent and ANZ Bank down 0.6 per cent, the big insurers rebounded from their Cyclone Alfred-induced sell-off over the past weeks. QBE Insurance jumped 4 per cent, while Suncorp rose 1.7 per cent and IAG added 1.5 per cent.

Biotech giant CSL (up 1.1 per cent) and electronics retailer JB Hi-Fi (up 3.6 per cent) also both defied the market doom and gloom, with the latter buoyed by a ratings upgrade from JPMorgan analysts.

New Hope Corporation rallied for a second day, finishing 4.2 per cent higher, after the coal miner on Tuesday reported a 35 per cent jump in half-yearly profit and announced a buyback of up to $100 million of its stock to boost shareholder returns.

The laggards

Utilities and real estate stocks – among the biggest gainers early this week – were leading Wednesday’s losses. Power providers fell, with Origin (down 1.9 per cent), Meridian Energy (down 1.6 per cent) and AGL (down 2 per cent) all retreating. Data centre owner Goodman Group lost 1.6 per cent after a tech sell-off on Wall Street overnight.

The miners had a mixed day, finishing in the red after climbing shortly after midday. BHP (down 0.2 per cent), Fortescue (down 1 per cent) and Rio Tinto (down 0.7 per cent) all fell. Mineral Resources slumped 6 per cent after a road train accident prompted a temporary pause to operations on its Onslow Iron haul road.

Embattled tech giant WiseTech Global lost 2.3 per cent after its directors concluded that founder and executive chairman Richard White misled the board about his personal relationships, but said his job remains secure.

Other local tech stocks followed their US peers lower, with software makers Xero and Technology One down 0.9 per cent and 0.7 per cent, respectively, and data centre operator Next DC losing 1.4 per cent.

Department store Myer fell 1.3 per cent after reporting flat sales and saying a bungled roll-out of a new robot warehouse has dealt an $8 million blow to its half-year profits.

Mortgage insurer Helia plunged 15.9 per cent as its shares traded ex-dividend, meaning they started trading without giving investors the right to the company’s latest dividend.

The lowdown

Gloomy investor sentiment returned to Wall Street overnight and ended the cautious buying mood of the past three sessions on the ASX, after ratings agency Fitch downgraded its US economic growth outlook from 2.1 per cent to 1.7 per cent over Donald Trump’s new and incoming tariffs.

“Apart from the direct impacts of tariffs, the elevated uncertainty around US policy will also likely weigh on business investment and potentially consumer activity,” NAB economists wrote in a research note.

“As a result, financial markets have come under stress, particularly US equities, with weak early 2025 economic data for the US also a factor.”

The S&P 500 dropped 1.1 per cent overnight for its latest swerve in a scary ride, where it tumbled by 10 per cent from its record and then rallied for two straight days. The Dow Jones fell 0.6 per cent and the Nasdaq composite sank 1.7 per cent.

Tesla was one of the heaviest weights on the US market after falling 5.3 per cent. The electric-vehicle maker’s stock has been struggling amid worries about sales declines because of anger at its CEO Elon Musk, who has been leading efforts to cut spending by the US government. EV rivals, meanwhile, continue to chip away at its business. China’s BYD on Monday announced an ultra-fast charging system that it says is nearly as quick as a petrol fill-up.

Alphabet sank 2.2 per cent after the owner of Google said it would buy cybersecurity firm Wiz for $US32 billion ($50 billion). It would be the company’s most expensive purchase in its 26-year history, and it could boost the tech giant’s in-house cloud computing amid burgeoning AI growth.

Investor attention is now firmly on the Federal Reserve, which will reveal its latest interest rate decision on early Thursday morning AEDT.

Virtually everyone on Wall Street expects the US central bank to hold its main interest rate steady as it waits for clues about how conditions play out. The US job market, for the moment at least, appears relatively stable after the world’s largest economy ended last year in a strong position.

“A rate cut [...] is not looking likely, following recent volatility and market uncertainty thanks to President Trump’s tariffs,” said Josh Gilbert, a market analyst at eToro.

“With tariffs set to make a number of products more expensive for Americans, the Federal Reserve is likely to be on close watch as the repercussions of Trump’s tariffs become evident over the next few months. If trade war tensions continue to escalate, the view of no rate cuts this year remains a real possibility,” he added.

The main focus will be on the forecasts the Fed will publish after the meeting, showing where officials expect interest rates, inflation and the economy to head in upcoming years. For now, traders on Wall Street are largely expecting the Fed to deliver two or three cuts to rates by the end of 2025.

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with AP, AAP

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