Federal election 2025 LIVE updates: ASX bounces higher after wild night on Wall Street; Dutton, Albanese prepare for first leaders debate tonight

The Australian sharemarket opened sharply higher this morning after its bloodbath on Monday, following a manic session on Wall Street overnight where US stocks careened as President Donald Trump threatened to crank his tariffs even higher, despite a stunning display showing what Wall Street thought of them.

The S&P/ASX 200 rose 78.1 points, or 1.1 per cent, to 7421.20 as of 10.13am AEST. The gains come after the index tumbled by 4.2 per cent on Monday.

The Australian dollar plunged to five-year lows of less than US60¢ on Monday and was trading at 60.12 US cents as of 10.14am.

Overnight, a rumour that Donald Trump was delaying his tariffs by 90 days sent Wall Street’s benchmark S&P 500 index rocketing higher before it came crashing back down minutes later after it was denied by a White House account.

Investors also had to digest Trump threatening drastically higher tariffs on Chinese goods, while he also gave his strongest signal to date that he would lower tariffs on countries that agree to remove their own trade barriers.

The S&P 500 slipped 0.2 per cent, the Dow Jones fell 0.9 per cent, and the Nasdaq composite edged up by 0.1 per cent.

The Australian sharemarket yesterday suffered a $100 billion wipeout driven by investors’ fears that an escalating global trade war will drag the United States into recession.

Listen to The Morning Edition’s analysis of this below.

The Greens are demanding the Reserve Bank hold an emergency board meeting to slash interest rates.

Financial markets are tipping the bank will cut official interest rates by at least a quarter percentage point at its next meeting on May 19-20 as it seeks to offset the fallout from Donald Trump’s tariff war.

But Greens economic justice spokesman Nick McKim said the bank should meet much sooner.
“The RBA will cut interest rates at their next meeting, but they should not sit on their hands for another six weeks while the crisis unfolds,” he said.

“CPI [consumer price index] is already in the RBA’s target band and trending down, and economists are debating the size of the upcoming interest rate cut, not whether or not it will happen. There is no justification for the RBA to delay.”

The last time the RBA held an emergency board meeting was in March 2020 during the early stages of the COVID pandemic. It cut the cash rate from 0.5 per cent to 0.25 per cent.

Earlier, Albanese teared up when he was speaking about a friend’s niece who lived with anorexia.

Asked about the mental health funding and whether it was something Albanese thought about personally, he recalled that when he was a young man, his friend’s niece was admitted to hospital with an eating disorder.

“That was really confronting. I was still pretty young at the time. I haven’t seen anything like that. She almost died. She is now well … and has children of her own. But that was really confronting,” he said as his eyes watered.

The Australian sharemarket is set to claw back some of Monday’s heavy losses at the open this morning after another volatile night on global markets.

Futures are pointing to a 0.7 per cent gain for the local bourse in a welcome relief for investors after Monday’s 4.2 per cent tumble.

Overnight, Wall Street had a wild session, after a rumour that Donald Trump was delaying his tariffs by 90 days sent Wall Street rocketing higher before it came crashing back down minutes later after it was denied by a White House account.

Investors also had to digest Donald Trump threatening drastically higher tariffs on Chinese goods, while he also gave his strongest signal to date that he will lower tariffs on countries that agree to remove their own trade barriers.

Wall Street’s benchmark index closed 0.2 per cent lower.

AAP

The prime minister is refusing to reconsider Labor’s spending commitments despite the federal Treasury warning Australia’s GDP will contract as a result of global economic shocks from US President Donald Trump’s sweeping tariff regime.

Anthony Albanese is instead playing on the trend of voters sticking with the incumbent government in times of turmoil.

“I’m absolutely certain that in these uncertain times now’s not a time for cutting, now’s not a time for retreat from policy that we’ve seen from the Coalition,” he said on Tuesday morning.

Albanese clearly thinks he is on solid ground, brushing past questions about how he will reign in deficits that are forecast to blow out $1 trillion by pointing to claims his opponent Peter Dutton is planning to roll out a $600 billion nuclear energy regime.

While the opposition disputes this figure, neither leader has yet outlined how they would rebalance the budget to weather the global economic storm.

They are both asking voters, heading to the polls on May 3, to take them on trust.

Treasurer Jim Chalmers goes out of his way to make sure he describes the Reserve Bank as “independent” whenever he gets asked about interest rate settings.

It’s the way treasurers of both persuasions have dealt with the RBA for the past 30 years. The government deals with fiscal policy and the experts at the Reserve Bank focus on monetary policy.

But in the wake of Donald Trump’s dumbest trade war of all time, Chalmers noted that financial markets were pricing in up to four interest rate cuts by year’s end.

He’s not saying the bank should deliver those cuts. That would be crossing the line between RBA independence and government intervention.

But he is making clear that voters know that investors reckon the bank will have the cash rate down to 3.35 per cent by Christmas.

It’s not a message to the RBA. Governor Michele Bullock and her team know full well what the markets are expecting. They track market expectations. In fact, the bank’s key forecasts are based upon market pricing of interest rate movements.

Markets – which a fortnight ago had expected just two rate cuts over the rest of 2025 – believe the bank will move quickly to safeguard the economy.

Any government policy response to Trump will take time. By contrast, monetary policy acts much more quickly as lower rates means more cash in the hands of mortgage holders.

In athletic terms, monetary policy is a sprinter in the blocks for a 100-metre sprint, while fiscal policy is toeing the line for the marathon.

Chalmers’ message is tied up in the whole cost-of-living crisis issue that, until Trump’s tariff war erupted, was front and centre of the campaign.

Trump might be trying to destablise the global economy, and inflict higher prices on American consumers, but the great Australian mortgage might just get cheaper.

That’s the silver lining the treasurer wants voters to find amidst the dark clouds unleashed by Donald Trump.