The latest US Federal Reserve decision is out, with the central bank delivering an immediate 25-basis-point rate hike and signalling the possibility of at least one more in 2026. The Federal Open Market Committee voted unanimously to raise the federal funds target range to between 3.75% and 4%.
Although the hike was largely expected, US stocks wobbled after the announcement before recovering slightly. The benchmark S&P 500 Index finished down 0.45%, while SPI futures in Australia overnight were down 63 points, or 0.72.
The XJO (main benchmark for measuring the Australian market), shrugged off the news and jumped 40 points in early morning trade.
The spillover also appears in the precious metals sector, with gold falling nearly 2% on the news to around US$4,300 ($6,063) an ounce. There is some relief for investors via the energy markets, with crude oil cooling after its recent run.
The international benchmark Brent crude closed down 2.9% at US$105 a barrel. There is also a data release from the American Petroleum Institute which shows diesel inventories building slightly. Saudi Arabia says it expects to repair its recently damaged pipeline faster than some market participants have assumed.
Of interest to mining investors is that the recent drawdown in the gold price does not appear to be deterring investment flows into the sector. ANZ Group Holdings (ASX:ANZ) suggests that much of the buying is coming from institutional investors in India and China.
Source: Bloomberg
Write to Callum Newman at Mining.com.au
Main image: ANZ
