Local shares rebound after wild Wall Street session
Australian shares have rebounded after a bloody start to the week, but a wild overnight session on Wall Street indicates the volatility has some way to run.
The S&P/ASX200 was up 37.6 points, or 0.51 per cent in early trading, to 7380.9, on Tuesday as the broader All Ordinaries lifted 56.8 points, or 0.75 per cent, to 7581.
The rebound came after two indexes plummeted more than 4.1 per cent each on Monday, erasing $109 billion from the top 500 stocks.
Wall Street closed mostly lower overnight with the S&P500 giving away 0.23 per cent after a wild, short-lived, 3 per cent rally on false news of a delay of US tariff implementation.
“Contrasting tariff messages caused wild swings in equity markets overnight, with European indexes sharply lower,” ANZ analysts wrote in a research note.
“The market briefly thought there would be a 90-day pause on tariff implementation, but this was denied.”
Trump has threatened to impose an extra 50 per cent tariff on goods from China unless it retracts its 34 per cent retaliatory impost on US goods.
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China’s commerce ministry hit back on Tuesday, saying it would never accept the “blackmail nature”.
It called Trump’s threat of an additional hit to Chinese goods “a mistake on top of a mistake”, and demanded all plans for tariffs be dropped and for talks to resolve US-China differences.
The market response to Trump’s “liberation day” tariffs has been mixed after he also invited trade partners to negotiate, increasing the likelihood that the tariffs may change.
Meanwhile, both major political leaders have tried to turn the market turmoil to their advantage on the campaign trail.
Prime Minister Anthony Albanese said while the domestic economy had turned a corner in recent months, the risks in global markets meant it wasn’t time for a change in government.
“We’re not immune from the impacts of the global economy, but what we have shown consistently is the preparedness to act for the times, to provide support for people,” he said in Sydney on Tuesday.
“We are in uncertain times, but I’m absolutely certain this is not the time to cut… now is the time to manage the economy responsibly.”
Albanese did not rule out the possibility of the Australian economy going into recession, but he said budget repair work was already underway.
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While Trump’s decision to slug Australian exports with 10 per cent tariffs made no sense, the government was dealing with it responsibly, he said.
“Because [the US is] the world’s largest economy, [tariffs have] implications for the global economy,” Albanese said.
“What we are doing is preparing for that. We want to make sure that… the impact of this is minimised.”
Opposition Leader Peter Dutton, meanwhile, used the uncertainty to push his economic credentials, arguing Albanese hasn’t done enough to press the case for a tariff exemption.
“Whether there’s a broader war in Europe, whether we’re talking about some conflict in the Middle East or elsewhere… or a shock to the stock market, the Australian prime minister needs to deal with whatever is coming our way,” he told ABC TV.
“The problem with our Prime Minister now is that he’s just too weak and too slow to respond to these issues and to act in our country’s best interests.”
Moomoo market strategist Jessica Amir said ongoing uncertainty in markets would likely cause volatility for some time.
“Investors that are not into riding roller-coasters should sit back until May or June, which is how long US Treasury Secretary Scott Bessent said tariff negotiations could take,” Amir said.
“While they are sitting on a big cash pile, investors need to see certainty before they’ll ‘buy the dip’.”
Gold was down for a third straight session, losing 2.4 per cent to $US2,963.19 per ounce.
The Australian dollar, which has plummeted more than 5 per cent since Trump’s tariffs announcement, was holding above 60 US cents after remaining below it for most of the night.
Albanese and Dutton go head to head in the first leaders’ debate of the election campaign in western Sydney on Tuesday night.
