Markets Hold Firm Amid Geopolitical and Policy Uncertainty

By Tim Montague-Jones, Australian Stock Report

US equity markets were steady overnight as investors responded to easing geopolitical tensions and fresh commentary from the Federal Reserve. The S&P 500 edged up 0.03%, staying near all-time highs, while the Dow Jones lost 0.3% and the Nasdaq rose 0.3%.

Ceasefire Between Israel and Iran Calms Markets

Markets took some comfort from a Trump-brokered ceasefire between Israel and Iran. The truce followed U.S. airstrikes on Iranian nuclear facilities, which President Trump declared “destroyed,” despite conflicting intelligence assessments. U.S. Secretary of State Marco Rubio said the strikes had dealt a major blow to Iran’s nuclear program. For now, the ceasefire appears to be holding, reducing the immediate risk of further escalation in the region.

Powell Cautious on Rate Cuts

Federal Reserve Chair Jerome Powell signalled a cautious approach to interest rate policy, delaying expectations for cuts. Powell stressed that tariff-driven inflation remains a concern, and the Fed would wait for greater clarity before making any moves. This comes amid softening consumer confidence and anticipation of new home sales data, reinforcing uncertainty around the economic outlook.

Corporate Earnings Send Mixed Signals

Company results painted a varied picture. General Mills and FedEx both fell after issuing weak forecasts, while BlackBerry jumped on upgraded revenue guidance. Nvidia reached a fresh record high after analysts raised their price target, extending its strong run. In the energy sector, BP pared gains after Shell denied reports of acquisition discussions.

Commodities: Gold Falls, Oil Gains

Commodities were broadly weaker, with gold falling 1.3% to US$3,319.50 an ounce as risk sentiment improved slightly. Brent crude rose 1.0% to US$67.80 a barrel, supported by geopolitical concerns. Iron ore was down 0.1% to US$94.63 a tonne. Base metals showed a mixed performance, with Aluminium and Copper falling, but Zinc and Nickel finishing stronger.

ASX 200 Edges Higher

In Australia, the ASX 200 closed up 0.04%, supported by gains in Financials and Utilities. However, the broader market was weighed down by declines in Info Tech, Materials and Healthcare. Despite the modest overall gain, sector performance reflected ongoing investor caution amid global uncertainty.

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Trump Eyes Powell Successor

According to The Wall Street Journal, President Trump is considering announcing a replacement for Federal Reserve Chair Jerome Powell by September or October. The report suggests Trump wants to influence the direction of monetary policy heading into the 2026 election season.

APA’s Basslink Power Cable Approved for Regulation

APA Group secured a major regulatory victory after the Australian Energy Regulator reversed its earlier stance, allowing Basslink to become a regulated asset. The 370-kilometre power cable connecting Tasmania and Victoria is currently the nation’s only unregulated transmission link. The AER said regulation would provide long-term benefits to consumers by stabilising power costs and supporting energy flow across the Bass Strait.

Aurizon Expects Slight Dip in FY25 Earnings

Aurizon announced that its FY25 underlying EBITDA is expected to be $1.58 billion, down slightly from $1.6 billion last year. The rail freight group also revealed a reshuffle in its executive ranks. CFO George Lippiatt will take over bulk freight operations, while Gareth Long has been named acting CFO. Group executive Anna Dartnell will depart on July 1.

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