(AUSTRALIA) – ASX – Australian shares are poised for a sharp decline at the opening, following the Bank of England’s announcement that it won’t rush into rate cuts next year, echoing the sentiments of Federal Reserve Chairman Jerome Powell. ASX futures were down by 97 points or 1.4% at 7:30 am AEST.
On Wall Street, major indices experienced losses: Dow -1.1%, S&P -1.6%, Nasdaq -1.8%. Notable stocks also saw declines, including BHP (-3.1%), Rio (-2.7%), Atlassian (-5.4%), Tesla (-2.6%), Apple (-0.9%), Amazon (-4.4%), NYSE Fang (-2.4%), Nvidia (-2.9%), Alphabet (-2.4%), and Arm Holdings (-1.4%).
S&P 500 faces potential downside
Yardeni Research noted, “Now that the S&P 500 is back down below its 50-day moving average, there might be more downside until the market finds support at its 200-day moving average, around 4200 currently.”
Fox Corp stock, however, rose by 3% following Rupert Murdoch’s announcement that he would step down from his top roles in his media empire to make way for his chosen successor, Lachlan Murdoch. News Corp’s Class A shares also advanced by 1.3%.
The Australian dollar declined by 0.5%, while the Bloomberg dollar spot index increased by 0.2%. Bitcoin was 1.8% lower at $26,625 on bitstamp.net at 7:09 am AEST.
The yield on the US 10-year note rose by 9 basis points to 4.49% near 4:59 pm in New York, while the UK’s 10-year yield spiked by 8 basis points to 4.29%.
Edward Moya of Oanda remarked, “Higher for longer could eventually translate into no Fed rate cuts in 2024.” He added, “The Fed sees a labor market that is not weakening, and the key drivers of inflation are still likely to keep prices elevated.”
The VIX, a measure of volatility, surged by 14% to 17.31 at 3:04 pm in Chicago, marking its highest level since mid-August.