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By Damian J. Troise
October 15, 2025 — 7.21am
The Australian sharemarket is set for strong gains this morning after Wall Street bounced between gains and losses overnight as trade tensions between the US and China continued to simmer and comments by Federal Reserve chair Jerome Powell fuelled optimism for interest rate cuts.
ASX futures were up 74 points, or 0.8 per cent, to 8994 as of 6.59am AEDT, forecasting strong gains at the open. It would be the second day of rising share prices after a rally in mining stocks pushed the local bourse up 0.2 per cent on Tuesday. The Aussie dollar traded at $64.83¢ at 7.13am.
Wall Street swung from a loss early in the session to close higher, raising expectations for a strong morning on the ASX.Credit: Bloomberg
US stocks wound up mixed after a rollercoaster day where the S&P 500 plunged in the morning, rallied by midday to trade up 0.4 per cent in its biggest down-to-up reversal since early April, and then fell back to close down 0.2 per cent. The index was weighed down by drops in several tech heavyweights including Nvidia and Broadcom even as most stocks rose.
The Dow Jones Industrial Average climbed 0.4 per cent, and the Nasdaq composite dropped 0.8 per cent.
The big swings throughout the session marked yet another sharp twist for markets over the last few days. Wall Street tumbled on Friday for its worst day since April and bounced back on Monday for its best day since May.
The latest swings follow China’s Commerce Ministry banning dealings by Chinese companies with five subsidiaries of South Korean shipbuilder Hanwha Ocean, swiping at Trump’s efforts to rebuild the industry in America. Later in the day, US Trade Representative Jamieson Greer told CNBC that Trump was still set to meet his Chinese counterpart Xi Jinping, bolstering hopes that the two countries could eventually work out a deal and sending markets higher.
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The ongoing trade war between the US and the world has been an unpredictable weight on the market. The trade conflict between America and China is potentially the most economically consequential, owing to those nations’ positions as the two largest economies in the world.
“We remain cautiously optimistic that both sides will ultimately pursue a negotiated resolution, given the significant economic stakes,” said Ulrike Hoffmann-Burchardi, chief investment officer for the Americas and global head of equities at UBS Global Wealth Management.
The US economy has so far dodged any major impact from the frequently shifting tariff policies. That could change if nations fall back into a cycle of retaliatory tariffs and companies pass along more of the higher costs to consumers.
The US government shutdown has put a halt to the usual economic updates on inflation, consumer spending and employment. That has made it more difficult for investors and economists to continue gauging the economic impact from tariffs. Wall Street is looking toward the latest round of company earnings and forecasts to get a better sense of the broader economic picture.
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Banks were the first big sector to kick off the earnings season, and the results hint at Wall Street notching one of its most profitable quarters ever. Still, executives from major banks expressed various degrees of caution about markets and the economy. JPMorgan Chase slipped 1.9 per cent, Wells Fargo rose 7.2 per cent and Citigroup rose 3.9 per cent.
Industrial firms and retailers were among the other companies making some of the biggest gains. Caterpillar rose 4.5 per cent and Walmart rose 5 per cent.
A lack of updates about the US economy has also left the Federal Reserve without much of the information it uses to make policy decisions. The central bank cut its benchmark interest rate by a quarter of a percentage point in September amid worries that unemployment could worsen. That marked its first cut of the year and Wall Street expects similar cuts at the Fed’s meetings in October and December.
Lapses in data about employment and inflation makes it more difficult for the central bank to balance its tasks of both helping to maintain strong employment while keeping prices stable. On Tuesday, Fed Chair Jerome Powell again signalled that the Fed is slightly more worried about the job market.
While he conceded that economic activity was on a “somewhat firmer trajectory than expected,” Powell stressed at a speech in Philadephia that “the downside risks to employment appear to have risen.”
That suggests the central bank is likely to proceed with additional cuts at its two remaining meetings this year, one late October and another in December.
Gold rose 0.8 per cent and remains above $US4,100 per ounce. The precious metal has soared 57 per cent in 2025 amid a long list of uncertainties, including tariffs and the economy.
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