ASX Live Coverage Summary – May 8

Welcome to our live updates for the ASX on Thursday, May 8. We are excited to introduce this new format and encourage you to manually refresh for the latest news. Your feedback is welcome here.

Federal Reserve Holds Interest Rates Steady

[8:45 am] The Federal Reserve has announced it will maintain interest rates at 4.25-4.50%, marking the third consecutive meeting without a rate change, as anticipated. Key points from the Fed’s statement include:

• Economic indicators have been influenced by tariff fluctuations, particularly in net exports.
• The US economy continues its solid growth trajectory.
• There are potential risks associated with rising unemployment and inflation levels.
• Inflation rates are still regarded as "somewhat elevated."

Analysts hold diverse perspectives on the Fed’s future rate adjustments due to ongoing tariff uncertainties:

• Bank of America does not anticipate any rate cuts given the resilience of economic indicators.
• Deutsche Bank predicts no cuts until December, unless there’s a notable decline in the labour market.
• Citi forecasts 125 basis points in cuts, beginning in June, in light of expectations for impending labour market downturns.

Factors Boosting Stock Performance

[8:40 am] The stock market experienced significant volatility overnight, oscillating between gains and losses. Notable factors contributing to the fluctuations include:

• US-China Trade Talks: Delegates from both nations are set to meet in Switzerland this weekend to discuss trade matters. This announcement led to a sharp rise in US futures, although analysts suggest these discussions are unlikely to be conclusive.

• Mixed Outcomes from the Fed: The Fed’s decision to keep rates stable aligned with market predictions. The mixed results have led to a generally dovish market outlook on upcoming interest rates.

• Revocation of Tariffs on Chips: Reports indicate that President Trump plans to revoke previous chip tariffs and is aiming to overhaul semiconductor trade restrictions, which resulted in US stocks reaching session highs.

Morning Update

[8:35 am] S&P/ASX 200 futures suggest a slight increase following a turbulent overnight trading session.

If you’re new to our coverage, please take a moment to familiarise yourself with the key points in today’s Morning Wrap.