The Australian sharemarket is set to jump this morning after US stocks rallied overnight, wiping out Monday’s plunge, as traders unleashed risky bets that the White House will clinch crucial trade deals with America’s top economic partners.
ASX futures were up 110 points, or 1.4 per cent, to 7946 as of 6.48am AEST, with some optimism returning after a series of reports nurtured expectations that tariff-related hostilities are easing as the US makes progress in fleshing out agreements. On Wall Street overnight, the benchmark S&P 500 index jumped 2.5 per cent overnight – its best day in two weeks – while the Dow Jones Industrial Average and the Nasdaq both climbed 2.7 per cent. The Australian dollar was trading 0.8 per cent lower at $US63.66¢.
It’s a shorter week on the ASX with lighter trading volumes following the long Easter weekend and ahead of Anzac Day on Friday when the local market will be closed again. The S&P/ASX 200 finished flat at 7816.7 points on Tuesday, with falls in tech and energy stocks offset by gains in materials, financials and consumer staples.
US stocks rebounded overnight on hopes the trade war could de-escalate.Credit: Bloomberg
A volley of tariff-related headlines continue to fuel outsized market moves on Wall Street as fast-twitch investors pour over news reports for clues on how to trade the crisis. White House Press Secretary Karoline Leavitt, in a news briefing, said that progress is being made on trade deals and that the “ball is moving in the right direction with China.” It followed a Politico report that the White House is nearing general agreements with Japan and India on trade.
Earlier, stocks had pushed even higher following a Bloomberg report of closed-door comments by US Treasury Secretary Scott Bessent saying the tariff standoff with China is unsustainable and that he expects the situation to de-escalate. “I do say China is going to be a slog in terms of the negotiations,” Bessent said, according to a transcript obtained by The Associated Press. “Neither side thinks the status quo is sustainable.”
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In the bond market, US Treasuries still posted smaller moves overnight, showing greater stability after Monday, when investors were worried about the implications of any effort to replace the Federal Reserve Chair by Donald Trump, who has berated Powell for being slow to cut interest rates. While the 10-year Treasury yield barely budged on Tuesday, two-year yields briefly rose to 3.82 per cent after lacklustre demand for an auction.
Similar to Monday, Tuesday’s big moves in stocks came amid lighter-than-usual trading, a backdrop that sometimes exacerbates swings. Volume in Nasdaq 100 shares was about 13 per cent below the recent average, data compiled by Bloomberg show, while Monday’s post-Easter level was around 20 per cent off the historical pace.
“We are in a period of extreme uncertainty, where one should not react too much to daily moves,” said Anwiti Bahuguna, Northern Trust Asset Management’s CIO of global asset allocation.
