Stocks on Wall Street were back on the decline as investors continue to fret about the White House’s tariff regime, while European markets were still the favour of the month.
US markets entered correction territory last week – where benchmarks were down 10% from their peaks – and the latest Bank of America fund manager survey showed a record shift by institutional investors out of US equities in the last month.
President Donald Trump’s tariff war cast a pall over markets in recent weeks, and treasury secretary Scott Bessent said countries will be told what reciprocal levies the US plans to impose on them on April 2.
The Federal Reserve’s policy review on Wednesday in the US is keenly awaited, where investors will be watching for the central bank’s view on the impact of the trade war.
“The Fed’s latest policy announcement comes at 7am tomorrow NZ time, with a widely held view of no change in rates, and no change to the median projection of two rates cuts this year as expressed in the dot plot, alongside a downward revision to growth and upward revision to inflation projections,” Bank of New Zealand senior markets strategist Jason Wong said in a note. “Fed chair Powell will want to keep options open regarding the policy outlook, still clouded by what additional tariffs President Trump will impose next month.”
The tech-heavy Nasdaq Composite dropped 1.8% as chipmaker Nvidia kicked off a major conference, where chief executive Jensen Huang told the audience advances in artificial intelligence will need vastly more computing power than previously thought.
Google-parent Alphabet’s US$32 billion acquisition of cybersecurity startup Wiz did little to lift the mood among investors.
European flair
Meanwhile, stock markets across the Atlantic extended their gains with mining companies and banking stocks underpinning a 0.3% increase for London’s FTSE 100 index, while Germany’s DAX 30 gained 1.1% after the European nation’s parliament approved expansive spending.
After European markets closed, Trump and his Russian counterpart Vladimir Putin wrapped up their call on the Ukraine conflict, with Russia agreeing to stop attacking energy infrastructure and begin ceasefire negotiations.
Australian futures are pointing to 0.5% decline for the S&P/ASX 200 index when the local trading day starts, while New Zealand’s S&P/NZX 50 index has a couple of heavyweight companies shedding rights to their dividends, which will weigh on the gross index.
Local data today include a consumer confidence survey and the December quarter balance of payments.
Dairy prices were largely unchanged at the latest Global Dairy Trade auction, with the average winning price at US$4,245 a tonne. Whole milk powder prices increased 0.2% to US$4,052 a tonne.
The kiwi dollar held on to its recent gains, trading at 58.14 US cents at 7am in Auckland from 58.18 cents yesterday.
Reporting by Paul McBeth. Image from Alev Takil on Unsplash.
