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Star Entertainment also found itself near the bottom of the index. After shares surged 20 per cent on Monday on buyout rumours, it gave back 7.4 per cent of their value after US giant Hard Rock International ruled out the possibility it would acquire the struggling Australian casino operator.

Sonic Healthcare shares slid 6 per cent after the company told the ASX in a statement that its profit would likely be about $1.6 billion in full-year 2023-24 – down about $100 million on its previous February estimate. It attributed the profit downgrade to inflation and foreign exchange headwinds.

Two of the big four banks were down: Commonwealth Bank shares finished flat and NAB closed nearly 0.1 per cent lower, while Westpac and ANZ edged 0.4 per cent and 0.5 per cent higher.

The lowdown

IG market analyst Tony Sycamore noted the ASX 200 had closed in positive territory every Monday for the past five weeks.

“The ASX 200 has eased today in quiet trading, giving back a small portion of yesterday’s now almost obligatory Monday rally,” Sycamore wrote in a note.

“However, with the Dow Jones again failing to cement a toehold above 40,000, which is coincidentally the same level the Nikkei rejected, and the Reserve Bank meeting minutes from the May board meeting offering little encouragement for the doves, a more cautious tone enveloped the local market.”

The Reserve Bank’s meeting minutes stated that while there had been “notable” developments to the economy since the last meeting, they were not enough to warrant a change in the cash rate.

“Inflation was still declining towards the target and the recent information did not materially alter its trajectory. Furthermore, the forecasts showed a credible path by which the board could meet its objectives in a timeframe that was consistent with the board’s strategy,” the minutes said.

“Holding the cash rate steady could also be an appropriate way to mitigate the risk that future demand growth turned out to be slower than envisaged in the forecasts, bringing inflation back to target more quickly than assumed and pushing unemployment well above the level consistent with full employment.”

AMP is still expecting a rate cut later this year, despite other economists predicting it might not happen until 2025.

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“The risk for interest rates in the next few meetings is still skewed to the upside, particularly if inflation comes on the high side again,” AMP chief economist Shane Oliver wrote in a research note to clients. “However, with the economy weak, the labour market cooling and inflation likely to keep slowing, our base case is for the RBA to remain on hold ahead of rate cuts starting in November or December.”

Overnight on Wall Street, the S&P 500 Index marked time with a gain of just 0.1 per cent to 5308.13, while the Nasdaq Composite gained 0.7 per cent to set another record high.

The Dow Jones was the laggard. It slipped 0.5 per cent.

All three of the big US stock indices set records last week in large part because of revived hopes that the Federal Reserve would cut interest rates this year as inflation cools.

More reports showing big US companies are earning fatter profits than expected also boosted stock prices.

This week has few top-tier economic reports, such as last week’s headliner that showed inflation may finally be heading back in the right direction following a discouraging start to the year. But some potentially market-moving reports on corporate profits are on the calendar.

In the bond market, yields ticked a little higher. The yield on the 10-year Treasury rose to 4.44 per cent, from 4.42 per cent Friday. The two-year yield, which more closely tracks expectations for Fed action, ticked up to 4.84 per cent, from 4.83 per cent.

The Federal Reserve on Wednesday will also release the minutes from its latest meeting, where it again held its main interest rate at the highest level in more than two decades.

Tweet of the day

Quote of the day

“Certainly, there are parts [of the business] that are not delivering to expectations. We also haven’t been on track to deliver our cost-out ambitions. Higher-than-expected inflation and cost pressures, including energy costs, have made meeting this ambition more challenging.

“The actions we are announcing today are difficult, but they are necessary. We need to be a more efficient and sustainable business.”

That’s Telstra chief executive Vicki Brady on why the telco giant is cutting up to 9 per cent, or 2800, of its workforce.

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