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ASX 200 down 0.9%, yields jump as rate cut hopes fade

EditorOliver Gray
Published 16/04/2024, 08:28 am
© Reuters
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Investing.com - The Australian stock market declined 0.9% after the first 30 minutes of Tuesday's trade, driven by unexpectedly robust US retail sales figures dampening hopes for interest rate cuts. At the same time, escalating military tensions in the Middle East pushed gold prices higher.

In the US, a volatile trading session saw the S&P 500 erase earlier gains and drop by more than 1% at the close, led by interest rate-sensitive tech giants NVIDIA Corporation (NASDAQ:NVDA), Microsoft Corporation (NASDAQ:MSFT), and Apple Inc (NASDAQ:AAPL).

The conflict in the Middle East has escalated, prompting a fall in Treasuries and a jump in gold prices, bringing it close to the record high set last week.

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US retail sales in March exceeded forecasts, demonstrating a resilient consumer demand and a surprisingly robust economy. This has fueled further anxiety about inflation becoming ingrained, thereby delaying the Federal Reserve's easing. Retail sales rose by 0.7%, almost double what economists had predicted, following a 0.9% increase in February.

Locally, the spotlight will be on China's economic health, with the release of retail sales, industrial production, GDP, and unemployment data. Rio Tinto Ltd (ASX:RIO) production report may also shed light on the condition of China's economy.

On the bond markets, Australia 10-Year rates were at 4.32%.

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