Nvidia starts $5 trillion club, Fed cuts rates, Wall Street retreats; ASX set to slide

Coles shares fell 2.7 per cent even after saying its supermarket sales rose 4.6 per cent in the latest quarter, more than double the rate of its bigger rival Woolworths, and continued at a similar growth level in October. Woolworths stock rose a further 2.7 per cent after its October growth rate of 3.2 per cent on Wednesday sparked hopes of a recovery of the grocery giant, which had been losing market share.

Tech companies also lost ground, with software makers Xero and Technology One down 2.6 per cent and 1.2 per cent, respectively, while embattled tech concern WiseTech Global lost 1.9 per cent.

James Hardie slumped 3.2 per cent after investors dumped chairwoman Anne Lloyd and two other board members in an unprecedented display of anger over the board’s disastrous $14 billion acquisition of US group Azek and the subversion of investor rights. The building materials maker’s annual general meeting concluded in 17 minutes, with the company offering no apology to investors for the board’s actions.

Lynas Rare Earths slipped 0.1 per cent, even after reporting its sales jumped to $200.2 million in the September quarter, up 66 per cent from a year earlier, as the world is scrambling to secure non-China-dependent supply of critical minerals, which are crucial for industries covering semiconductors, defence technology and renewable energy.

As the only producer of so-called heavy rare earths outside China, Lynas is playing a critical role in that scramble, and said it was “engaged with various governments regarding supply and fair pricing frameworks to ensure maintenance of current rare earths supply chains.”

The big iron ore miners all traded stronger. BHP, the world’s largest miner and the second-biggest stock on the ASX after CBA, rose 0.9 per cent. Fortescue Metals gained 1.9 per cent and Rio Tinto added 0.2 per cent. Global banking giant Goldman Sachs on Wednesday raised its iron ore price forecast for 2026 on macroeconomic support, tighter inventories and resilient Chinese steel production, although it’s still expecting prices to drop next year. Iron ore futures rose for a fourth session overnight, climbing 1.2 per cent to $107.05 a tonne.

The big four banks reversed early losses to move into the green. Commonwealth Bank added 0.7 per cent, Westpac rose 1 per cent, National Australia Bank climbed 0.9 per cent and ANZ Bank rose 0.4 per cent. Financial stocks make up more than a third of the entire ASX, meaning even smaller movements can blunt the overall market decline.

Energy stocks also advanced after oil bumped higher overnight, snapping a three-day losing streak, as investors blockessed a large drop in US inventories and the impact of Western sanctions against leading Russian crude producers. Oil and gas major Woodside rose 1.4 per cent and its smaller rival Santos edged up 0.1 per cent.

On Wall Street overnight, US stocks were hovering around fresh records overnight after the Federal Reserve, as expected, cut its key interest rate, while AI giant Nvidia surged to become the first company valued at $US5 trillion ($7.6 trillion) on the US sharemarket.

The S&P 500 lost 0.4 per cent, the Dow Jones slipped 0.3 per cent and the Nasdaq composite was 0.1 per cent lower. All three indexes were coming off their latest all-time high. Markets have retreated after the head of the Federal Reserve warned that more cuts to interest rates, which Wall Street has been banking on, are not guaranteed.

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Stocks erased what had been modest gains after Chair Jerome Powell warned that it “is not a foregone conclusion” that the Fed will cut its main interest rate again at its next meeting in December, “far from it.”

“That needs to be taken off the board,” Powell said.

Powell’s comments came about a half hour after the Fed announced its second cut of the year to its main interest rate, in hopes of helping a slowing job market.

Powell’s warning hit Wall Street because many traders had seen it as a near certainty that the Fed would cut in December, along with potentially more in 2026, and they had already driven stock prices to records in part because of it. Powell said officials had “strongly differing views about how to proceed in December.”

Even Wednesday’s decision to cut, which was seen as a slam dunk, came with less authority than expected. One member of the Fed’s committee, Jeffrey Schmid, voted to keep the federal funds rate steady instead of lowering it.

Nvidia climbed 2.4 per cent and became the first company valued at $US5 trillion on Wall Street, just three months after the AI darling was the first to break through the $US4 trillion barrier.

In other international markets, indexes were mixed in Europe following a stronger finish in Asia.

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Tokyo’s Nikkei 225 jumped 2.2 per cent to another record. Seoul’s Kospi rose 1.8 per cent to its own all-time high after President Donald Trump met with South Korea’s leader following his visit in Japan.

Stocks rose 0.7 per cent in Shanghai ahead of a meeting between Trump and China’s leader, Xi Jinping. The world’s two largest economies have been locked in an escalating trade war, with Washington imposing high tariffs and tightened technology controls and China retaliating with curbs on rare earth shipments, one of its key sources of leverage.

In the bond market, the yield on the 10-year Treasury rose to 4.05 per cent from 3.99 per cent late Tuesday as traders pared their bets for a coming cut to rates in December.

with AP, Bloomberg, AAP