Australian shares are set to begin lower on Wednesday, tracking overnight weakness in New York as Wall Street’s rally showed signs of fatigue and investors weighed cautious signals from the United States Federal Reserve.
By 7 am AEST (9 pm GMT), the ASX SPI200 Index December 2025 futures contract was down 31 points, or 0.3%, at 8,883.0.
Risk appetite faded during the U.S. session after Federal Reserve Chair Jerome Powell stopped short of endorsing additional rate cuts.
In remarks delivered overnight, Powell reiterated a cautious approach, warning that “near-term risks to inflation are tilted to the upside and risks to employment to the downside”.
He added: “Two-sided risks mean that there is no risk-free path.”
Major U.S. benchmarks eased from record highs on Tuesday (Wednesday AEST), with the tech sector leading the retreat.
Nvidia fell 2.8%, reversing some of the prior session’s sharp gains, while each of the so-called Magnificent Seven stocks finished in negative territory.
Attention will now shift to domestic economic data, with the Australian Bureau of Statistics set to release its monthly CPI indicator.
Markets are forecasting a slight rise to 2.9% from 2.8% previously. Analysts at ANZ said: “We expect headline inflation to lift to 3.3% y/y in August, driven by a robust lift in electricity prices.”
According to the ASX RBA Rate Tracker, the ASX 30 Day Interbank Cash Rate Futures October 2025 contract was trading at 96.42 as of 22 September, implying an 8% probability of a rate cut to 3.35% at the central bank’s next policy meeting.
On the bond markets, Australian government yields were steady, with the 10-year at 4.247% and the 2-year at 3.385%.
