ASX 200 Set for Decline as S&P 500 Slips Ahead of Federal Reserve Decision

Highlights: 

• Market Caution Intensifies: S&P 500 retreats following a brief two-day rebound, with investors focused on upcoming tariff decisions and the Federal Reserve’s interest rate outlook. 
• Mineral Resources Pauses Onslow Iron Haulage: Mineral Resources Limited (ASX:MIN) temporarily halts operations on the Onslow haul road for safety assessments. 
• Myer’s First-Half Profit Falls: Myer Holdings Limited (ASX:MYR) reports an 18% decline in 1H25 net profit after tax to $42.4 million, with softer trading conditions continuing into the second half. 

ASX 200 futures pointed to a weaker open, down 51 points (-0.64%) as of 8:30 am AEDT, as global markets struggled to maintain their recent rebound. US equities extended losses, spending most of the session near their lowest levels. Investors remained cautious ahead of key economic decisions, with the Federal Reserve’s latest interest rate announcement scheduled for release. Additionally, concerns over US trade policy and the looming April 2 reciprocal tariff decision added to market jitters. 

Skepticism surrounded the sustainability of the recent market rebound. All members of the Magnificent 7 stocks had turned negative year-to-date, contributing to broader weakness. A notable shift in investor sentiment was reflected in the latest Bank of America survey, showing that allocations to US equities dropped to 23% underweight, marking the lowest level since June 2023. The sharp contraction in exposure coincided with rising fears of stagflation, ongoing trade conflicts, and diminishing confidence in US economic dominance. Cash levels among fund managers rebounded to 4.1% from 3.5%, as investors sought defensive positioning. 

Tesla Inc. (NASDAQ:TSLA) continued its downward trajectory amid increasing competition from Chinese electric vehicle manufacturers. BYD Company Limited (HKG:1211) shares reached record highs after unveiling a new vehicle lineup capable of achieving a five-minute charge. Siemens AG (ETR:SIE) announced workforce reductions, cutting 6,000 jobs within its automation and EV charging units, as global demand dynamics shift. Alphabet Inc. (NASDAQ:GOOGL) was reportedly in talks to acquire cloud security firm Whiz for approximately $33 billion. Meanwhile, Amazon.com Inc. (NASDAQ:AMZN) was evaluating a restructuring move that could result in the reduction of 14,000 managerial positions by the end of March. 

The Federal Reserve's latest policy update remained in sharp focus. While the CME FedWatch tool signaled a 99% probability of no change in interest rates, investor attention turned to the central bank’s updated economic projections. Expectations pointed to downward revisions in growth forecasts and an upward adjustment in inflation outlooks. While two rate cuts were still projected for the year, concerns persisted over the possibility of a more hawkish stance in response to economic resilience. 

Trade tensions remained a dominant theme in global markets. The US administration was reportedly exploring individualized tariff rates and value-added tax considerations in trade policy decisions. The Treasury Department suggested that countries actively negotiating trade agreements to lower barriers might avoid harsher tariff measures. Meanwhile, China announced tighter export restrictions on electric vehicle battery and semiconductor materials, a move likely to impact global supply chains. Additionally, China halted liquefied natural gas (LNG) imports from the US while renewing export approvals for pork and poultry products. 

Economic concerns extended beyond trade policies. Canada’s inflation unexpectedly surged to 2.6% in February, surpassing expectations of 2.2%, following the expiration of temporary sales tax relief measures. The data raised questions about the Bank of Canada’s monetary policy direction amid persistent inflationary pressures. 

On the ASX, corporate updates dominated the session. Mineral Resources Limited (ASX:MIN) temporarily paused haulage operations at its Onslow Iron haul road to address safety concerns after an incident involving the tipping of two trailer sections on March 17. Myer Holdings Limited (ASX:MYR) reported a weaker 1H25 performance, with net profit after tax falling 18% to $42.4 million. Group sales for the first five weeks of the second half declined by 2.6%, impacted by a challenging consumer environment and shifting promotional activities. Trading conditions remained mixed as consumer caution persisted. Meanwhile, Lottery Corporation Limited (ASX:TLC) Chairman Doug McTaggart disclosed the purchase of 25,000 shares, bringing his beneficial ownership to approximately 67,000 shares. 

Commodity markets saw continued strength, particularly in gold. Spot gold prices surged past US$3,000 per ounce, closing 1.12% higher at US$3,034. However, the Gold Miners ETF reflected broader market caution, rising only 0.6% despite the metal’s sharp gains. 

With the ASX 200 poised to break its three-day winning streak, focus remains on global economic policy developments and corporate earnings trends. Markets continue to assess the potential impact of US trade policies, Federal Reserve guidance, and shifting investor sentiment, all of which could shape near-term market direction.