Australian sharemarket set to open higher
By Rita Nazareth
The Australian sharemarket is set to open higher, with futures pointing to a rise of 39 points, or 0.5 per cent, at the open. The local bourse was up at Monday’s close by 1.3 per cent as mining heavyweights, banks and the energy sector gained ground.
The Australian dollar has strengthened. It was fetching 63.37 US cents around 5.30am AEDT.
Investors are struggling to game out the economic spillovers of the trade war given the back-and-forth in negotiations.Credit: Dominic Lorrimer
On Wall Street, stocks on Monday have pushed higher alongside bonds as a measure of calm returned after seven sessions of tumultuous trading spurred by President Donald Trump’s disruptive trade war.
About 90 per cent of the companies in the S&P 500 rose, with the gauge up over 1 per cent. Despite the White House’s softer tariff stance toward the technology sector, the high-profile group underperformed the market. Carmakers rallied as Trump floated exceptions for auto parts facing 25 per cent US levies. Treasuries snapped a five-day selloff that drove 10-year yields up by the most in over two decades.
To Matt Maley at Miller Tabak, it seems like investors are starting to conclude that there are now at least some boundaries to how aggressive the administration can be with their proposals.
“If the rebound is going to have legs in the near term, investors will probably need to see continued signs of flexibility from the White House on tariffs,” said Chris Larkin at E*Trade from Morgan Stanley.
Investors are still struggling to game out the economic spillovers of the trade war given the back-and-forth in negotiations. While US officials insist the tariff strategy is carefully constructed, critics see the trading order as subject to the whims of a transactional president.
“The worst may be over, but the coast is not clear,” said Michael Wilson at Morgan Stanley.
“As we begin this week, again, traders will be fixated to social media feeds and the newswires for the latest on this never ending saga of ‘tariffs-on, tariffs-off’,” said Jay Woods at Freedom Capital Markets. “One thing the current administration has been great at is keeping market participants on their toes.”
Strategists at Citigroup led by Beata Manthey lowered their view on US equities, saying the case to diversify away from the asset class is strengthening as the trade war undermines economic growth and earnings.
Despite all the convulsions and uncertainty, most equities strategists still expect the S&P 500 to rally through the remainder of 2025.
The S&P 500 put up a strong performance last week, but is still down roughly 9 per cent for the year as Trump has placed substantial tariffs on goods imported from China, Canada, Mexico, the EU and numerous other US trade partners. The benchmark closed trading on Tuesday having lost 15 per cent in 2025, before reversing course on Thursday when Trump announced a 90-day delay on many of his tariffs.
The 15 per cent drop is historically significant. Going back to 1957, the S&P 500 has fallen at least that much through early April 16 times, and on only three occasions has it recovered to end December in the green, according to data compiled by Ryan Detrick at Carson Group. And in each of those instances — 2020, 2009 and 1982 — the market was rescued by the Federal Reserve, which stepped in to support a faltering US economy.
In corporate news, Goldman Sachs Group became the latest firm to report its highest-ever quarter for equity trading, after JPMorgan Chase & Co. and Morgan Stanley hit similar milestones last week amid volatility triggered when Trump took office with a raft of audacious policies. The banks’ top executives see it continuing, at least for now, as markets remain on edge over the extent and impact of the tariff onslaught announced by the president earlier this month.
Apple’s iPhone unit shipments surged 10 per cent in the first quarter, according to industry tracker IDC. Nvidia said it will produce as much as half a trillion dollars’ worth of AI infrastructure in the US over the next four years through manufacturing partnerships. Intel has agreed to sell a 51 per cent stake in its programmable chips unit Altera to Silver Lake Management. Pfizer halted development of its highest profile experimental drug.
The S&P 500 rose 1.2 per cent as of 2:37 pm New York time. The Nasdaq 100 was up 1 per cent and the Dow Jones Industrial Average climbed 1.1 per cent.
Bloomberg
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