Headline

• ASX 200 futures point 63 points lower (-0.72%), signalling a weaker Australian open after Wall Street declined.
• Federal Reserve raised rates by 25 basis points, marking its first-rate hike since 2023; the decision was unanimous.
• Fed projections indicated another 25-basis-point increase could occur before year-end, as inflation remains above target.
• S&P 500 fell 0.45%, while the Dow dropped 1.21% and Nasdaq slipped 0.01%.
• US 2-year Treasury yield climbed to around 4.72%–4.73% as markets adjusted to a more hawkish rate outlook.
• Brent crude slipped to around US$105 per barrel amid a surprise inventory build and signs Saudi Arabia’s East-West pipeline could restart within days.

Global Markets Overview

Global equity markets delivered a mixed performance, with sentiment shaped by tighter monetary policy expectations and uneven regional momentum. Wall Street ended broadly weaker, as the S&P 500 and Dow Jones retreated while the Nasdaq Composite was comparatively resilient. Investors remained cautious after the Federal Reserve’s latest policy decision, with higher bond yields weighing particularly on rate-sensitive and cyclical areas of the market. In Europe, the FTSE 100 advanced, supported by selective strength across defensive and commodity-linked shares despite continued concerns around global growth and elevated interest rates. Canada’s S&P/TSX Composite finished lower. In the Asia-Pacific region, Japan’s Nikkei strengthened, reflecting continued buying interest in large-cap exporters and technology names. Indian equities also moved higher amid firm domestic sentiment. New Zealand’s NZX 50 posted a strong gain, standing out among developed markets as investors responded positively to local market drivers and improving risk appetite. Overall, global markets remained mixed and cautious, with tighter US monetary policy and rising bond yields weighing on risk appetite, while selective gains across Europe, Japan, India and New Zealand provided some support.

Commodities & Crypto

Commodities traded weaker, with selling pressure visible across energy, precious metals and selected industrial commodities. WTI crude led the decline as easing supply concerns and inventory developments reduced near-term support for oil prices. Gold also moved lower as investors assessed the implications of tighter monetary policy and elevated bond yields, while silver followed a similar direction amid weaker precious-metal sentiment. Copper edged down, reflecting cautious expectations around global industrial demand and manufacturing activity. Uranium also softened, extending the generally weaker tone across the commodity complex.

In contrast, Bitcoin remained relatively stable, with only a marginal move, suggesting more balanced sentiment across major digital assets despite volatility in traditional markets. Overall, the session reflected a defensive adjustment across commodity markets, with crude oil experiencing the most pronounced weakness. Precious metals remained under pressure from the interest-rate environment, while industrial commodities showed limited momentum. Cryptocurrency performance was relatively stable.

Bond Yields

Bond markets remained under pressure, with US Treasury yields moving higher after the Federal Reserve’s rate increase, while Australia’s 10-year yield eased modestly and Japan’s 10-year yield stayed near elevated levels. Australia’s 10-year government bond yield eased slightly, suggesting modest demand for domestic sovereign debt despite persistent concerns over inflation and interest rates. Japan’s 10-year bond yield was relatively steady, remaining close to elevated levels as markets continued to assess the Bank of Japan’s policy outlook and domestic inflation dynamics.

In the United States, longer-dated Treasury yields moved higher, with both the 10-year and 30-year yields advancing as investors adjusted to a tighter Federal Reserve stance following its latest policy action. The rise in US yields indicates continued pressure across the long end of the curve, reflecting concerns around inflation persistence, future rate settings and government borrowing requirements. Overall, bond-market conditions remained cautious, with US yields showing the clearest upward pressure, Australian yields easing modestly, and Japan’s 10-year yield holding near elevated levels.

Key Drivers

• Wall Street fell for a third straight session, with the Dow down 1.21%, S&P 500 off 0.45% and Nasdaq nearly flat.
• The Fed raised rates by 25 bps to 3.75%–4.00%, marking its first-rate increase since 2023.
• The FOMC decision was unanimous, underscoring policymakers’ renewed focus on persistent inflation.
• Fed projections pointed to another hike this year, with 12 of 18 officials expecting one more increase.
• US 2-year Treasury yield jumped to around 4.73%, reflecting a more hawkish near-term rate outlook.
• US 10-year Treasury yield remained around 5%, keeping pressure on equity valuations and borrowing costs.
• Higher Treasury yields and tighter Fed policy hit risk appetite, particularly across cyclical and rate-sensitive assets.
• Energy stocks came under pressure as crude prices retreated from recent highs.
• Bitcoin slipped below US$76,000 after a key US Senate procedural vote on crypto regulation failed.
• US retail sales surged 1.2% in August, exceeding market expectations and signalling resilient consumer spending.
• Strong consumer demand complicates the Fed’s inflation fight, potentially supporting further policy tightening.
• Inflation remains above the Fed’s target, with policymakers signalling that underlying price pressures have not improved enough.
• Fed Chair Kevin Warsh avoided firm forward guidance, keeping future rate decisions dependent on incoming economic data.
• Bank of England is expected to hold rates at 3.75%, as policymakers assess inflation risks and tighter financial conditions.
• UAE, Saudi Arabia and Qatar raised rates by 25 basis points, following the Federal Reserve’s latest policy increase.
• Bank of Japan is expected to raise rates by 25 basis points, potentially taking its policy rate to a 31-year high.
• RBA is expected to keep rates at 4.35% on 29 September, while major banks continue to anticipate further tightening.
• Overall, markets remain vulnerable to higher yields, persistent inflation and further Fed tightening, leaving global risk sentiment under pressure.

ASX Company News

• Contact Energy Limited (ASX: CEN) reported August 2026 mass-market electricity and gas sales of 550 GWh, compared with 454 GWh a year earlier, while customer netback reached NZ$148.57/MWh. Wholesale contracted electricity sales were 1,087 GWh, with electricity and steam net revenue of NZ$164.59/MWh. Unit generation costs improved to NZ$40.90/MWh from NZ$57.52/MWh, supported by stronger hydro generation and lower thermal output. Contact also highlighted renewable projects under construction, including Te Mihi Stage 2, the Glenbrook-Ohurua Battery and Glorit Solar.
• Transurban Group (ASX: TCL) reported August 2026 Group average daily traffic growth of 3.4% from the prior corresponding period. Sydney traffic increased 3.3%, Melbourne rose 3.5% and Brisbane advanced 1.0%, while North America recorded a strong 12.3% increase. Growth in Sydney was supported by the M7 following completion of the M7-M12 Integration Project, while Melbourne benefited from the West Gate Tunnel contribution. Transurban also noted that more than 90% of Group revenue is CPI-linked or subject to fixed escalators.

Stocks trading ex-dividend today

• a2 Milk Company Limited (ASX: A2M) – AU$0.067
• EDU Holdings Limited (ASX: EDU) – AU$0.030
• Embelton Limited (ASX: EMB) – AU$0.200
• Flight Centre Travel Group Limited (ASX: FLT) – AU$0.300
• Lycopodium Limited (ASX: LYL) – AU$0.370
• SKS Technologies Group Limited (ASX: SKS) – AU$0.065
• South32 Limited (ASX: S32) – AU$0.075
• Supply Network Limited (ASX: SNL) – AU$0.440
• Tourism Holdings Limited (ASX: THL) – AU$0.063
• WAM Income Maximiser Limited (ASX: WMX) – AU$0.007
• West African Resources Limited (ASX: WAF) – AU$0.200

Key Economic Drivers (What to Watch Today)

• Bank of England Rate Decision (9:00 pm AEST): Markets will assess the policy decision and guidance for signals on the future direction of UK interest rates and inflation risks.
• Rates up, stocks down: The Fed decision, forecasts and press conference drove another sizeable lift in short-term rate expectations, pushing the US 2-year yield to 4.73%. Rate-sensitive sectors remained under pressure, while resources weakened sharply as copper and gold reversed early gains.
• Bond yields remain a key equity risk: With the US 10-year yield holding around the 5% level, elevated discount rates could continue to pressure equity valuations, particularly growth stocks, REITs and other highly leveraged sectors.
• Commodity weakness may pressure ASX resources: Lower copper, gold and oil prices could weigh on Australian mining and energy stocks.

Summary

• ASX 200 futures point to a weaker open, down 63 points (-0.72%), after Wall Street surrendered early gains following the Federal Reserve’s first-rate hike in three years.
• Fed projections indicated another rate increase could occur before year-end as inflation remains above target.
• Wall Street fell for a third straight session, with the Dow and S&P 500 lower while the Nasdaq was nearly flat.
• The US 2-year Treasury yield climbed to around 4.73%, reflecting a more hawkish policy outlook.
• The US 10-year Treasury yield held near 5%, maintaining pressure on valuations and borrowing costs.
• The Federal Reserve lifted its policy rate by 25 basis points, marking its first upward move since 2023.
• Gold, silver, copper and uranium all declined, highlighting broad weakness across commodities.
• Bitcoin slipped below US$76,000 after a US Senate crypto procedural vote failed.
• US retail sales jumped 1.2% in August, reinforcing signs of resilient consumer demand and complicating the inflation outlook.

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