ASX 200 Set to Rebound as S&P 500 Retreats from Record Highs Amid Earnings Updates

Highlights 

• S&P 500 declines: The index retreats from record highs following weak Walmart guidance and renewed tariff concerns. 
• ASX 200 futures rise: Local markets set for a rebound after three consecutive sessions of declines. 
• Key earnings reports: Block, Newmont, QBE Insurance, Telix Pharmaceuticals, and Yancoal release financial results. 

Market Overview 

ASX 200 futures indicate a positive start to the session, up 16 points (+0.19%) as of 8:30 am AEDT. This follows a volatile trading period where the index fell 2.7% across the past three sessions. Meanwhile, Wall Street retreated from record highs, with the S&P 500 pressured by weaker-than-expected Walmart guidance and renewed concerns over tariffs introduced by former U.S. President Donald Trump. 

Global Market Movements 

Major U.S. indices closed lower, with the S&P 500 slipping from its all-time high. Walmart's underwhelming Q4 earnings report and disappointing forward guidance were key contributors to the downturn. Trump’s expansion of tariffs on lumber and forest products further added to market uncertainty. 

Investment banks continue to express caution, with Goldman Sachs warning of a potential market correction due to weaker capital inflows. Citigroup remains skeptical about further U.S. stock gains, citing risks associated with Trump’s policies. Meanwhile, a surge in call options on the VIX Index is fueling concerns over a potential volatility squeeze. 

Corporate Earnings and Stock Movements 

• Alibaba (NYSE:BABA) surged 8.0% after reporting a strong rise in Q4 profits, driven by growth in its cloud and eCommerce businesses. 

• Walmart (NYSE:WMT) declined 6.5% despite a revenue and earnings beat, as its full-year 2026 revenue growth guidance of 3-4% fell short of the 4.2% consensus estimate. Earnings-per-share projections also missed expectations by 8%. 

• Palantir (NYSE:PLTR) fell 5.2% after CEO Alex Karp announced a new stock sale plan. 

Central Banks and Economic Outlook 

Concerns over inflation are resurfacing as Trump’s tariff proposals weigh on Federal Reserve policy decisions. The Fed is reportedly considering pausing balance sheet reductions due to risks surrounding the U.S. debt ceiling. Meanwhile, the European Central Bank's Stournaras expects interest rates to decline to 2% by 2025, while Japan’s central bank is projected to raise rates to 0.75% in the same period. The People’s Bank of China has held lending rates steady amid ongoing trade tensions. 

Geopolitical Developments 

• Trump's recent remarks regarding a new trade deal with China suggest a potential shift in U.S.-China relations, including increased Chinese purchases of U.S. goods and potential investments in the U.S. economy. 

• European leaders express concerns over Trump's increasingly pro-Russia stance, which is reshaping geopolitical alliances. 

• Ukraine and European allies continue to push back against Trump's criticism of their economic strategies and military alliances. 

ASX Corporate Earnings Updates 

Several major ASX-listed companies released earnings reports, with key takeaways as follows: 

• Block Inc. (ASX:SQ2) reported Q4 adjusted EBITDA of $757 million, beating estimates by 2.3%. Q1 EBIT guidance came in 12.5% ahead of expectations, while FY2025 EBIT guidance of $2.1 billion was 11% above consensus estimates. 

• Newmont Corporation (ASX:NEM) reported a 122% year-over-year increase in 2024 earnings per share, reaching $3.48 versus expectations of $2.83. The company declared a final dividend of 25 U.S. cents per share and issued 2025 production guidance of 5.9 million ounces, exceeding previous forecasts. 

• QBE Insurance Group (ASX:QBE) reported a 26.9% increase in 2024 underlying net profit after tax (NPAT) to $1.72 billion, ahead of Citi’s estimate of $1.65 billion. The full-year dividend was declared at 87 cents per share, exceeding consensus estimates of 77 cents. The company provided guidance for mid-single-digit gross written premium (GWP) growth in 2025. 

• Telix Pharmaceuticals (ASX:TLX) reported a first-half NPAT increase of 860% to $49.9 million. Full-year revenue guidance was upgraded to between $1.18 billion and $1.23 billion, surpassing the consensus estimate of $1.02 billion. Research and development expenditure is expected to increase by 20-25% in FY2025. 

• Yancoal Australia (ASX:YAL) reported a 33% decline in full-year NPAT to $1.22 billion but declared a fully franked final dividend of 52 cents per share, representing an approximately 9% yield. The company noted that first-quarter production in 2025 is likely to be lower due to mine plan sequencing. 

Key Market Themes to Watch 

• Strength in commodities: Nickel, copper, and lithium ETFs all recorded overnight gains of 2-3%, signaling potential support for resource stocks. 

• ASX earnings momentum: Newmont, QBE, and Telix reported results that surpassed expectations, setting a positive tone for local markets. 

• Block Inc. post-earnings reaction: Despite solid quarterly and full-year guidance, its NYSE-listed shares fell 6% after hours, highlighting ongoing investor caution. 

• Yancoal’s dividend reinstatement: After a pause in distributions last reporting season to pursue mergers and acquisitions, the company’s return to dividends could drive a re-rating of the stock. 

Outlook 

With U.S. markets under pressure, ASX 200 futures suggest a potential rebound at the open, particularly with strong earnings results from key local stocks. However, investor sentiment remains fragile as geopolitical risks, central bank policies, and commodity price fluctuations continue to influence global markets.