Critical mineral miner Lynas Rare Earth (down 3.5 per cent), IGO (down 3.3 per cent) and ResMed (down 3.2 per cent) were among the top large-cap decliners.

Falling commodity prices shook investor confidence. Spot gold fell 1.7 per cent, Brent crude lost 1 per cent and iron ore declined 2.3 per cent.

The lowdown

AMP chief economist Shane Oliver said despite “lots of noise” inflation was still falling, and central banks still remain on track for interest-rate cuts this year.

“The recent US and Australia inflation scare looks to be receding; Australian economic growth is weak, with the economy going backwards were it not for massive population growth,” Oliver wrote in a research note to clients.

“The labour market is cooling, which will result in slower wages growth, and Australian mortgage holders have seen far bigger rate hikes in the mortgage rates they pay than their counterparts in most other comparable countries,” he said.

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“We are allowing for a 0.25 percentage point cut in the cash rate to 4.1 per cent in November or December, and two cuts next year.”

On Wall Street, the S&P 500 Index fell 0.7 per cent in its sharpest drop since April. The Dow Jones Industrial Average lost 1.5 per cent and the Nasdaq Composite Index 0.4 per cent.

Stocks broadly struggled under the weight of higher yields in the bond market. Treasury yields cranked up the pressure following stronger-than-expected reports on the US economy, which forced traders to rethink bets about when the Federal Reserve could offer relief to financial markets through lower interest rates.

One report suggested growth in US business activity is running at its fastest rate in more than two years. A separate report showed the US job market remains solid, despite high interest rates.

Treasury yields turned higher immediately after the business activity report.

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Quote of the day

“The idea of keeping some gas back for use here is quite popular, the assumption being that the supply is more reliable and affordable,” Resolve Strategic pollster Jim Reed said, after an exclusive poll for this masthead showed 60 per cent of voters supported Labor’s future gas strategy.

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News Corp staff are bracing for wide-ranging job cuts as part of an impending restructure that would likely deliver casualties across the company’s middle-management and senior editor ranks. The imminent restructure looks to have already created winners and losers, with the weekday editors of Sydney’s Daily Telegraph, Ben English, and the Herald Sun in Melbourne, Sam Weir, seemingly winning the power struggle over their weekend counterparts.

With AP

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