What's Affecting Markets Today
US weaker as Powell still not dovish on rates
On Monday, U.S. stocks closed lower as Federal Reserve Chair Jerome Powell reiterated a gradual approach to interest-rate cuts in a television interview. Dow Jones fell 0.7% to 38,380.12, S&P 500 declined 0.3% to 4,942.81, and Nasdaq Composite dropped 0.2% to 15,597.68. Caterpillar and McDonald’s earnings, following last week’s tech-driven rally, influenced market sentiment. The Institute for Supply Management’s services index rising to 53.5% in January, beating expectations, suggested a robust economy, dampening rate-cut hopes. Powell’s comments on delaying rate cuts further weighed on expectations. Despite a record Dow close on Friday, investors may be cautious, anticipating a market breather. Analysts advise focusing on solid earnings, the foundation of the recent rally, and using pullbacks to enhance portfolios.
ASX Stocks
ASX 200 - 7581.6 (-0.6%)
Key Highlights:
The Reserve Bank of Australia (RBA) maintained its cash rate at 4.35%, signaling a continued tightening bias. Despite holding rates, the RBA revised down its inflation and growth forecasts while upgrading the jobless rate projection. The central bank emphasized the possibility of future interest rate increases. Australian shares declined, mirroring Wall Street’s overnight dip, and bond yields rose after Federal Reserve Chairman Jerome Powell dampened expectations of rate cuts. The S&P/ASX 200 dropped 0.6%, with mining and technology stocks facing notable losses. The materials sector, led by mining giants BHP and Fortescue Metals, fell over 1% due to a drop in iron ore prices. Furniture retailer Nick Scali rose 15.7% after exceeding first-half profit guidance, while Myer surged 15.8% following a positive trading update projecting a net profit of $49-53 million for the half-year.
Leaders
NCK Nick Scali Ltd 16.40%
IMU Imugene Ltd 6.77%
ZIP ZIP Co Ltd 5.33%
SLX SILEX Systems Ltd 4.36%
REG Regis Healthcare Ltd 3.93%
Laggards
WAF West African Resources Ltd -11.97%
COH Cochlear Ltd -6.16%
A4N Alpha Hpa Ltd -5.36%
LTM Arcadium Lithium Plc -5.32%
RED RED 5 Ltd -5.15%