The laggards

Pro Medicus plunged 6 per cent, recording the sharpest drop among large-cap stocks, followed by Woodside (down 5.1 per cent) and Newmont (down 3.4 per cent).

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The energy sector, which has plunged more than 20 per cent in a year, was the weakest on the local bourse on Tuesday, as global economic uncertainty continues to dampen demand and supply of oil. Brent crude tumbled 3.4 per cent over the week and is trading at about $US76 a barrel, down from about $US85 a month ago.

Investors briefly rallied after the Reserve Bank handed down its decision at 2.30pm, but soon after pulled back as governor Michelle Bullock said interest rate cuts in the next six months were “not in the agenda” and the market’s expectations for cuts were “a little bit ahead of themselves”.

The lowdown

AMP chief economist Shane Oliver said Bullock’s comments continued to lean hawkish, but he believed the cash rate had peaked.

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“Our assessment remains that the RBA’s cash rate has peaked, and we see five reasons why the next move in rates will likely be down: monetary policy remains restrictive; the full impact of past rate hikes is still feeding through; recession risks are high as indicated by the ongoing slump in real household spending per capita and slowing population growth which will add to the risk; forward-looking jobs indicators warn of a significant further rise in unemployment ahead; and wages growth has peaked, which will slow underlying services inflation,” Oliver said.

Capital senior financial market analyst Kyle Rodda said although relative calm returned to the ASX on Tuesday, it was unclear whether it was because “the tempest has passed or we are merely in the eye of the storm”.

On Wall Street overnight, the S&P 500 lost 3 per cent, its worst drop since 2022. The Dow Jones fell by 1084 points, or 2.7 per cent, and the Nasdaq Composite crumbled by 3.7 per cent.

The drops were just the latest in a global sell-off that began last week. Japan’s Nikkei 225 plunged 12.4 per cent on Monday for its worst day since the Black Monday crash of 1987.

It was the first chance for traders in Tokyo to react to Friday’s report showing US employers slowed their hiring last month by much more than economists expected. That was the latest piece of data on the US economy to come in weaker than expected, and it’s all raised fear the Federal Reserve has pressed the brakes on the US economy by too much for too long through high interest rates in hopes of stifling inflation.

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