The Australian Securities Exchange (ASX) experienced fluctuations today, with the ASX 200 index initially rising by 0.3% to 8,838 points before slipping back into negative territory. This comes amid a series of international developments, including US President Donald Trump’s renewed criticism of Federal Reserve Chair Jerome Powell, and geopolitical tensions impacting global markets.
In the early hours of trading, energy stocks were the standout performers on the ASX, buoyed by a 2.5% rise in Brent crude oil prices to $US65.46 per barrel. This surge was linked to ongoing unrest in Iran, where mass protests have reportedly led to significant casualties. Meanwhile, the Australian dollar weakened slightly, dropping 0.3% to 66.85 US cents.
Neuren Pharmaceuticals Leads ASX Gains
Neuren Pharmaceuticals saw a notable increase in its share price, climbing 5.6% by midday AEDT. The boost followed the company’s projection that its DAYBUE medication could achieve global net sales of approximately US$700 million by 2028. DAYBUE is a treatment for Rett syndrome, a rare neurological disorder.
Elsewhere on the ASX, energy companies like Karoon Energy, Woodside Energy, and Beach Energy posted gains, while firms such as Block and Suncorp saw declines.
US-China Tech Tensions and Nvidia’s Conditional Export Approval
The Trump administration has approved the sale of Nvidia’s H200 AI chips to China, albeit with stringent conditions. These include third-party reviews of the chips’ capabilities and limits on the quantity that can be exported to China. Nvidia must ensure sufficient availability of the chips in the US, and Chinese buyers are required to demonstrate “sufficient security procedures” and are prohibited from using the chips for military purposes.
Jay Goldberg, an equities analyst with Seaport Research, commented on the situation, stating,
“As we have seen, Chinese companies have found ways to get access to those chips, and the US government appears highly transactional in their approach to chip exports.”
Trump’s Continued Criticism of Jerome Powell
President Trump intensified his verbal attacks on Federal Reserve Chair Jerome Powell, labeling him a “jerk” and questioning his competence. This follows the Department of Justice’s controversial criminal investigation into Powell, which has drawn bipartisan criticism and support for Powell from international central bankers, including Reserve Bank of Australia Governor Michele Bullock.
In a joint statement, central banks from around the world expressed solidarity with Powell, emphasizing the importance of central bank independence. The statement underscored that,
“The independence of central banks is a cornerstone of price, financial, and economic stability in the interest of the citizens that we serve.”
Global Market Reactions and Economic Indicators
Wall Street closed in negative territory, with the Dow Jones, S&P 500, and Nasdaq Composite all experiencing declines. Financial stocks were particularly affected following Trump’s proposal to cap credit card interest rates and impose tariffs on countries trading with Iran. This led to a sell-off in shares of JPMorgan, Visa, and Mastercard.
Meanwhile, safe-haven assets like gold and silver reached new heights amidst ongoing geopolitical uncertainties and expectations of further US interest rate cuts. The spot price of gold briefly hit a record before settling slightly lower.
The Australian Bureau of Statistics reported a 0.2% drop in job vacancies for the November quarter, driven by a decrease in private-sector opportunities. This reflects a broader trend of tightening in the job market, with fewer positions being advertised.
As the day progresses, market analysts and investors will be closely monitoring these developments, assessing their potential impacts on global economic stability and future market trends.
