Outlook for the day: Negative after US tariff threats weighed on commodity prices and US stocks finished mixed but broadly lower.
ASX futures: down 25 points or 0.3%
Overnight themes:
US stocks fell to their lowest in more than a month after a collapse in consumer confidence sharpened fears the US economy was weakening, and President Donald Trump reaffirmed plans to hit neighbours Canada and Mexico with 25% tariffs.
The S&P 500 declined 0.47% to a fourth straight loss. The Nasdaq lost 1.35% as investors rotated out of momentum stocks into havens, while Nvidia declined ahead of tonight's trading update. The Dow overcame early weakness to advance 0.37% as a drop in treasury yields boosted rate-sensitive pockets of the market.
Worries about economic growth were heightened by news that a measure of consumer confidence suffered its biggest decline since August 2021. The Conference Board's confidence index dived to 98.3 in February from 102.3 last month. “This is the third consecutive month on month decline, bringing the Index to the bottom of the range that has prevailed since 2022,” said Stephanie Guichard, senior economist of global indicators at The Conference Board. The report was the latest in a series of anaemic economic signals in the last week, including disappointing retail sales and manufacturing data and a downbeat outlook from retailer Walmart.
“All of that comes together to call into question the underpinning of what has been the strength of the U.S. economy the last couple years, which is the consumer and the job market” - Ross Mayfield, investment strategist analyst at Baird Private Wealth Management (per CNBC).
Treasury yields retreated as investors piled into bonds, a traditional haven in times of economic doubt. The yield on 10-year US treasuries declined more than 10 points to its lowest since November. That in turn lifted real estate stocks and other defensive sectors.
A split market saw gains for consumer staples +1.69%, real estate +1.14% and materials +0.8%. Drags included energy and growth sectors.
US President Donald Trump told reporters his plans for 25% tariffs on imports from Canada and Mexico were "on time and on schedule". The tariffs were originally supposed to start in February, but were delayed until March 4 after Canada and Mexico negotiated a delay to address White House grievances related to border control and drug inflows.
The renewal of US tariff threats weighed on commodity prices leveraged to global growth. US oil fell to its weakest level since December. Iron ore retreated more than 2%. Copper slipped 1.05% on the London Metal Exchange to US$9,395 a metric ton. "Tariff threats continue to hang over the markets and are contributing to the general unease," Marex consultant Edward Meir told Reuters. Nickel, aluminium, zinc and tin also declined.
Gold dropped to a one-week low amid reports of profit-taking after prices hit a fresh high the previous session. Gold futures settled US$44.40 or 1.5% lower at US$2,918.80 an ounce. Spot gold shed around 1.28%. "You are seeing profit-taking as well as people looking to get to the sidelines and to re-establish positions at a lower price," Bob Haberkorn, senior market strategist at RJO Futures, told Reuters.
US uranium miners fell to a five-month low, mirroring a collapse in yellowcake since prices peaked around US$110 a pound in January 2024. Spot uranium prices have since fallen back to just below US$65. The Global X Uranium ETF declined 1.87% overnight to a level last seen in mid-September.
Bitcoin slumped to a three-month low following the biggest digital theft in history. The coin was lately down more than 6% at US$88,316 after falling as low as US$85,991, according to MarketWatch. Crypto prices fell in unison after hackers stole US$1.5 billion in Ether from crypto platform Bybit.
