ASX 200 Treads Water Amid Tariff Uncertainty, Tech Momentum and Inflation Shift

Highlights

• ASX futures decline as Wall Street delivers a mixed signal led by tech outperformance

• Inflation slowdown in Australia influences interest rate expectations ahead of RBA meeting

• Trade tensions and defence-related developments shape sector-specific movements

The ASX 200 tracked a restrained session as global cues from Wall Street shaped early market tone. While major US indices diverged with technology stocks extending gains, other segments saw uneven traction. Locally, Australian shares responded to a softer inflation print and heightened trade policy concerns, with only selective strength across sectors.

The uneven nature of global equity momentum and ongoing tariff disputes continued to weigh on broader market sentiment, curbing gains in domestic equities despite isolated sector catalysts.

Trade Developments and Corporate Caution Press Market Confidence

Investor focus remained fixed on escalating global tariff dynamics, especially as the deadline for reciprocal duties between major economies approaches. In the US, the administration continued to pursue international trade negotiations with countries including Japan and South Korea, while litigation over tariff legitimacy and proposed retaliatory levies against Europe added complexity.

FedEx’s weak profit outlook also highlighted broader concerns about trade disruption, prompting cautious sentiment across logistics and industrial names. The combination of corporate restraint and unresolved trade tensions shaped risk appetite across regions.

Inflation Slowdown Raises Rate Cut Expectations Locally

Australia’s latest inflation figures revealed a more modest rise in consumer prices, raising speculation of monetary easing in the upcoming central bank meeting. The headline consumer price index for May fell below consensus, accompanied by a retreat in core readings.

This inflation moderation, seen alongside global economic softening, increased expectations for a rate adjustment. Market observers recalibrated their outlook for the Reserve Bank of Australia’s policy direction in light of subdued price pressures and external uncertainties.

Xero, Civmec and GenusPlus Deliver Strategic Corporate Moves

In corporate developments, Xero Ltd (ASX:XRO) completed a capital raising to fund its acquisition of US payments firm Melio. The move aligns with the company’s growth framework and strengthens its North American presence. The deal marks a significant step in expanding Xero’s financial ecosystem.

Meanwhile, Civmec Ltd (ASX:CVL) advanced its position in the defence sector through the acquisition of Luerssen Australia, a naval shipbuilder. The expansion is expected to enhance its shipbuilding and manufacturing capability.

GenusPlus Group Ltd (ASX:GNP) issued an upgraded guidance for the upcoming fiscal year. The company cited a strong contract pipeline and consistent operational execution as supporting factors for the outlook.

Aurizon Adjusts Forecast While Austal Gains on Defence Optimism

Aurizon Holdings Ltd (ASX:AZJ) revised its full-year earnings guidance downward due to lower coal transport volumes and deferred revenue under contractual clauses. Leadership changes were also implemented, signalling structural adjustments across business segments.

Conversely, Austal Ltd (ASX:ASB) continued to benefit from a positive defence contracting environment. Expectations of a Strategic Shipbuilding Agreement and sustained demand for maritime infrastructure supported sentiment around the stock.

Geopolitical Calm and Powell's Comments Shape Macro Direction

In broader policy commentary, Federal Reserve Chair Jerome Powell maintained a cautious stance on rate cuts despite inflationary pressure from global tariffs. Geopolitical stability in the Middle East, following ceasefire developments and diplomatic signals, contributed to a more balanced tone in global markets.