Investing.com - The Australian share market opened 0.9% lower of Friday, echoing a late sell-off in New York. The shift in market sentiment was triggered by comments from Neel Kashkari, the President of the Federal Reserve Bank of Minneapolis after he suggested that if inflation continues to stagnate, there might be no US rate cuts this year. He further added that he had only projected two cuts for March.
The volatility index, known as the VIX, closed 14% higher at 16.35, marking its highest point in 2024.
By the end of the trading day, the Dow Jones Industrial Average had lost 530 points, or 1.4%. Both the S&P 500 and the NASDAQ Composite saw a decrease of 1.2% and 1.4% respectively. The yield on the US 10-year note dropped by 5 basis points to 4.30%.
Kashkari, in a LinkedIn Live interview, voiced concerns about recent inflation data, which has been more stagnant than decreasing. He emphasized that policymakers need reassurances that inflation will further subside before initiating a rate-cutting cycle.
Gold retreated from its record high, while oil prices fluctuated, eventually rallying above $US90 a barrel due to escalating tensions in the Middle East, particularly between the US and Israel. Iron ore prices fell below $US100 a tonne, while copper reached a 14-month high.
Federal Reserve policymakers continue to share their perspectives, highlighting the uncertainty surrounding the current economic climate and the inflationary dynamics. The March US jobs report, due to be released at 11.30pm on Friday, will be a key focus for investors and analysts alike, potentially offering more clarity on the future economic trajectory.