The Australian sharemarket is expected to open lower on Wednesday, following overnight declines on Wall Street. US stocks fell despite positive economic and employment data, with investors reacting to rising bond yields. The strong economic reports fueled concerns about persistent inflation and a potential delay in interest rate cuts by the Federal Reserve.
The Australian sharemarket is set for a slow start on Wednesday morning after falls on Wall Street overnight, with US stocks dropping despite upbeat news on the country’s economy and employment.
Stocks dropped under the weight of rising yields in the bond market, which jumped immediately after the release of two encouraging reports on the economy. One said US employers were advertising more job openings at the end of November than economists expected. The other said activity for finance, retail and other services businesses grew much faster in December than expected.
Expectations for fewer cuts to interest rates in 2025 had already been building for weeks, which sent longer-term Treasury yields upward. So have worries about other possible Trump policies, such as tax cuts, which could swell the US government’s debt and likewise push yields higher. High yields can put heavy pressure on stocks seen as the most expensive, which pulls the lens toward Nvidia and other Big Tech stocks that have soared in the frenzy around artificial-intelligence technology.
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