Investors face a fourth successive day of losses as Australian shares are expected to open lower on Wednesday following a sell-off on Wall Street and ahead of the release of more data to provide a guide on the timing of the next interest rate cut.
Australian Securities Exchange (ASX) futures trading showed the S&P/ASX 200 September share price index (SPI) contract trading 37 points or 0.4% below the previous settlement at 8,841 points, at the time of writing.
U.S. sharemarkets fell on Tuesday (Wednesday AEST) with technology stocks leading the way as bond yields rose due to rising budget deficit and debt concerns, and amid uncertainty about United States tariffs, which were ruled illegal by a court.
The Dow Jones Industrial Average lost 0.6%, the S&P 500 shed 0.7% and the Nasdaq Composite dived 0.8%, marking a poor start to a month which history has shown as the worst for equities.
In a decision which Trump denounced as “highly partisan”, a federal appeals court ruled on Friday that most of his tariffs were unconstitutional and only Congress could impose such sweeping levies.
Wealthspire Advisors Senior Vice President and Adviser Oliver Pursche said markets were worried that Trump had alienated trading partners and lost the revenue from tariffs.
"By the same token, it's too early to call this the beginning of a great correction," he was quoted as saying in a Reuters story.
"At the end of the day, we all know that August-September tend to be more volatile and a little more challenging for investors before we get into the fourth quarter, which tends to be a pretty solid one."
Chief CommSec Economist Ryan Felsman said the ASX was awaiting second-quarter gross domestic product data today to assess the outlook for monetary policy with a rate cut in November fully priced in, but a move in September rated only a 20% chance.
He said interest-rate sectors like real estate could come under pressure, but losses would be limited by the impact of higher oil, gold and iron ore prices.
The Australian market dropped on Tuesday, bringing consecutive losses to three days, with the S&P/ASX 200 Index closing 0.3% lower at 8,900.6.
Stocks in focus will include Origin Energy (ASX: ORG) and Whitehaven Coal (ASX: WHC), which trade ex-dividend from today.
RBA Governor Michele Bullock will deliver the Shann Memorial Lecture in Perth at 6:00 pm AEST (8:00 am GMT) on Technology and the Future of Central Banking at the RBA.
In fixed interest markets, Australian Government bond yields defied the U.S. trend with two-year rates falling 0.15% to 3.369% and 10-year rates edged up by 0.02% to 4.366%.
