Renewed United States tariff threats that drove Wall Street lower have set the price expectations bar lower in Australia as trading resumes on Monday.
President Donald Trump’s recommendation of 50% tariffs on the European Union (EU), which he has since rescinded, pulled the rug from under the three main U.S. stock indices on Friday (Saturday AEST).
The Dow Jones Industrial Average dived 0.6%, the S&P 500 lost 0.7% and the Nasdaq Composite plunged 1% after Trump reignited trade tensions by warning Apple (NASDAQ: AAPL) could face 25% tariffs on phones not made in the U.S.
“If I were to put a headline on today's story, it would be 'Here We Go Again!'" Ocean Park Asset Management Chief Investment Officer James St. Aubin was quoted by Reuters as saying.
Trump has since withdrawn the threat after a phone call with E.U. President Ursula von der Leyen.
Notwithstanding that the escalation of trade tensions was short-lived, the S&P/ASX 200 June share price index contract was quoted 30 points (0.3%) below the previous settlement at 8,350 points at the time of writing.
This indicates the Australian market will give up the small gains made on Friday when the market indicator added 0.15% to 8,360.90.
In corporate news, Elders (ASX: ELD) has released its half-year earnings while there will be interest in stocks that performed well on Friday including uranium producers Boss Energy (ASX: BOE) and Deep Yellow (ASX: DYL) and other energy companies.
In the fixed interest market, yields rose on 10-year and two-year Australian Government bonds by 0.8% and 0.65% to 4.42% and 3.409% respectively.
The U.S. financial markets are closed on Monday or the Memorial Day public holiday.
