The Australian share market is headed for a weak start after US stocks fell in choppy trading as investors assessed the Federal Reserve’s interest rate stance and a batch of soft earnings early in the financial reporting season.
After a rally in the last two months of 2023 that extended into the first quarter, equities have struggled with the S&P 500 registering its fourth straight session of declines. The index is on pace for its third straight weekly loss as investors have dialled back expectations for the timing and size of the Fed’s rate cuts.
“It’s just an excuse for traders to kind of move to the sidelines and markets to kind of take a breath after a really, really strong five months of gains.” After the market began to largely price in a June cut from the Fed earlier this year, expectations for a cut of at least 25 basis points have shrivelled to 16.8 per cent, and for a July cut to 46 per cent, CME’s FedWatch Tool showed.