Australian shares hit record high on expectations of big Fed rate cut
The Australian stock market hit a record high on Tuesday, as the market's expectations of a significant interest rate cut by the Federal Reserve this week continued to rise. The S&P/ASX 200 index in Australia rose 0.3% to 8,148.8 points, surpassing the previous record high of 8,148.7 points set on August 1. According to the CME's FedWatch tool, 62% of market participants currently expect a 50-basis-point rate cut. Traders are awaiting the August employment report in Australia on Friday to see how the labor market is responding to the high interest rates. The Reserve Bank of Australia has kept the interest rate stable at 4.35%, a 12-year high, since November 2023. Financials, which are sensitive to interest rates, rose 0.3%, with the Commonwealth Bank of Australia up 0.4%. Gold stocks have risen for the sixth consecutive trading day. Mining stocks edged up 0.1%, with industry giants BHP Group up 0.3% and Rio Tinto up 0.7%. Tech stocks surged by as much as 1%, hitting a record high.
