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Highlights:
- US Federal Reserve Holds Rates Steady: Benchmark interest rate remains unchanged at 4.25%-4.50%, with GDP growth forecast for 2025 revised lower.
- Wall Street Gains: Nasdaq Composite (+1.4%), S&P 500 (+1.1%), and Dow Jones Industrial Average (+0.9%) rally following the Fed’s decision.
- Corporate Earnings in Focus: Washington H. Soul Pattinson and Company (ASX:SOL) and Brickworks Limited (ASX:BKW) release financial updates ahead of the Australian market open.
The ASX 200 is set to open higher following a strong session on Wall Street, where major indices advanced after the US Federal Reserve left interest rates unchanged as expected. The central bank’s decision to keep the benchmark lending rate at 4.25%-4.50% for the second consecutive meeting signaled a cautious approach amid ongoing economic uncertainties. Alongside the rate decision, the Fed revised its GDP forecast for 2025 down to 1.7% from a previous estimate of 2.1%, citing increased uncertainty in the economic outlook.
Wall Street responded positively to the policy stance, with the Nasdaq Composite climbing 1.4%, the S&P 500 gaining 1.1%, and the Dow Jones Industrial Average advancing 0.9%. The market’s reaction reflected investor relief that the Fed maintained a steady policy course despite global economic concerns. Large-cap technology stocks led the charge, while sectors tied to interest rates, such as real estate and utilities, also saw gains.
In corporate news, Washington H. Soul Pattinson and Company (ASX:SOL) reported earnings per diluted share of AU$0.9833 for the fiscal first half, up from AU$0.9273 in the prior year. Brickworks Limited (ASX:BKW) posted underlying earnings per diluted share of AU$0.563 for the fiscal first half, reversing a prior-year loss of AU$0.272 per diluted share. The earnings updates place a spotlight on key industrial and investment firms ahead of the Australian market open.
Australia’s unemployment report for February is scheduled for release at 11:30 am Sydney time, providing further insight into labor market conditions and potential implications for monetary policy. The report is expected to play a crucial role in shaping the Reserve Bank of Australia’s (RBA) policy outlook, particularly as inflation concerns persist.
The Australian benchmark index fell 0.4% on Wednesday, closing at 7,828.30, as investors digested global economic developments and domestic earnings reports. The upcoming session is likely to see a shift in sentiment, driven by optimism from Wall Street’s performance and corporate earnings releases.
Market participants will be watching commodity prices closely, particularly in the mining and energy sectors, which remain highly sensitive to global economic trends. The performance of key stocks in these industries, such as BHP Group (ASX:BHP), Rio Tinto (ASX:RIO), Fortescue Metals Group (ASX:FMG), and Woodside Energy Group (ASX:WDS), will be critical in determining the direction of the ASX 200.
Investors will also be monitoring financial stocks, including the major banks—Commonwealth Bank of Australia (ASX:CBA), National Australia Bank (ASX:NAB), Westpac Banking Corporation (ASX:WBC), and Australia and New Zealand Banking Group (ASX:ANZ)—as market expectations around interest rates and economic growth continue to evolve.
As global markets assess the Fed’s latest stance and upcoming economic data, the Australian share market remains poised for a strong start, with attention turning to the latest earnings releases and economic indicators shaping the trading landscape.
