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IT firms (down 1 per cent) and utilities (down 1.1 per cent) were poor performers, with WiseTech (down 2.7 per cent) and Meridian Energy (down 0.5 per cent) both trading lower.
Toll roads operator Atlas Arteria (down 4.4 per cent) was the biggest large-cap decliner, followed by Mineral Resources (down 3.6 per cent).
On the flipside, JB Hi-Fi (up 1.9 per cent), Pro Medicus (up 1.6 per cent) and James Hardie Industries (up 1.6 per cent) were among the biggest large-cap advancers.
Super Retail Group slipped 0.2 per cent after the announcement that board member and Fonterra executive Judith Swales will chair its board after its AGM in October, replacing Sally Pitkins.
The lowdown
Capital.com senior market financial analyst Kyle Rodda said markets would be cautious going into a “double whammy” of key economic events, with the release of US inflation data and the Federal Reserve’s latest interest rate decision tonight.
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“The ASX200 remains under pressure because of softer commodity prices. The materials sector remains the biggest drag, although a lift in Woodside Energy courtesy of a broker upgrade supported the energy sector,” he wrote in a note to clients.
“The drop in yields in US trade manifested in lower Aussie bond yields, but the move didn’t have a comparable impact on equity valuations, especially those interest rate-sensitive sectors that drove Wall Street to new all-time highs.”
Overnight, Wall Street’s benchmark indexes drifted to a mixed close, but the S&P 500 and Nasdaq composite still managed to notch more records.
The S&P 500 rose 0.3 per cent, driven largely by gains in tech stocks, even though more stocks fell than rose within the index. The tech-heavy Nasdaq composite rose 0.9 per cent. Both indexes set record highs for the second straight day. The Dow Jones slipped 0.3 per cent.
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The key events for the market this week come on Wednesday US time with the latest update on inflation at the consumer level and the Federal Reserve interest rate decision. The US will also release its latest update on prices at the wholesale level on Thursday.
Wall Street expects the government’s consumer price index to remain unchanged at 3.4 per cent in May. Inflation as measured by CPI is down sharply from its peak at 9.1 per cent in 2022, but it has seemingly stalled around 3 per cent. That has complicated the Fed’s goal of taming inflation back to its target rate of 2 per cent.
The Fed has held its main interest rate at its highest level in more than two decades and Wall Street is hoping for one or two cuts to that rate this year. Virtually no one expects the Fed to move its main interest rate at its current two-day meeting, which started on Tuesday. Policymakers will be publishing their latest forecasts on Wednesday for where they see interest rates and the economy heading.
Data on the US economy have come in mixed recently, and traders are hoping for a slowdown that stops short of a recession and is just right in magnitude. A cooldown would put less upward pressure on inflation, which could encourage the Fed to cut rates. Lower interest rates could fuel more growth for the broader stock market. Major indexes have been rallying to records, though, despite worries about sticky inflation and high interest rates.
Treasury yields fell in the bond market. The yield on the 10-year Treasury slipped to 4.40 per cent from 4.47 per cent late Monday.