Markets Overview

  • ASX SPI 200 futures up 0.3% to 8,758.00
  • S&P 500 up 0.3% to 6,985.45
  • Dow Average up 0.1% to 49,577.33
  • Aussie up 0.4% to 0.6714 per US$
  • US 10-year yield rose 2.0bps to 4.1851%
  • Australia 3-year bond yield rose 1.4 bps to 4.10%
  • Australia 10-year bond yield rose 1.5 bps to 4.70%
  • Gold spot up 2.2% to $4,609.72
  • Brent futures up 1.0% to $63.98/bbl

Economic Events

  • 10:30: (AU) Jan. Westpac Consumer Conf SA MoM, prior -9.0%
  • 10:30: (AU) Jan. Westpac Consumer Conf Index, prior 94.5
  • 11:00: (AU) Australia to Sell A$300 Million 4.75% 2054 Bonds on Jan. 13

Australia plans to buy and stockpile minerals essential for defense and advanced technologies from domestic mining companies to help strengthen global supply chains. BHP is set to wait out Rio Tinto’s talks to take over Glencore and is not currently planning a bid, Reuters reported.

Stocks and bonds bounced from session lows, but caution remained on Wall Street after the Trump administration escalated its attack on the Federal Reserve, raising concern about central bank independence.

While the S&P 500 erased its drop and hit a new record, unease over interference in monetary policy kept a lid on the market. Capital One Financial Corp., American Express Co. and JPMorgan Chase & Co. sank as President Donald Trump called on credit-card companies to cap rates at 10% for a year. Alphabet Inc.’s value rose to $4 trillion.

The Fed’s perceived independence from government whims is a bedrock assumption of markets, and any change to that perception could weigh on sentiment. While independence risks will likely be a key theme in 2026, Krishna Guha at Evercore says there are two ways to interpret US markets stabilizing.

“The first is this does not matter to markets,” he said. “The second is it matters a lot, but partly for this reason investors think this move is going nowhere and the administration will look for a de-escalation off ramp. We are firmly in the second camp.”

Investors have spent the past week shrugging off various Trump dramas and focusing on the economy, which has shown signs of growing health. Everything from improved productivity data, robust semiconductor demand, rising shipping rates and gains in industrial production and services output has emboldened market bulls.

The defining feature of this market is how little investors seem to care about an increasingly noisy backdrop including geopolitics, policy risk, and macro uncertainty, according to Mark Hackett at Nationwide.

“The bull market still has legs, and it’s entirely possible that we see further gains irrespective of what happens with internal and external policy, said Giuseppe Sette at Reflexivity.

The S&P 500 edged up to around 6,980. The KBW Bank Index lost almost 1%. Alphabet led gains in megacaps as Google confirmed a multiyear deal with Apple Inc. to power the iPhone maker’s artificial-intelligence technology.

The yield on 10-year Treasuries advanced two basis points to 4.19%. A dollar gauge slid 0.2%. Gold hit fresh highs.

“US equities were under pressure early, only to stabilize and inch higher as initial concerns that the pressure on Fed independence would weigh on risk assets faded,” said Ian Lyngen at BMO Capital Markets. “If nothing else, there appears to be dip-buying interest in both stocks and bonds at the moment.”

Earlier stock losses came after Jerome Powell said the central bank had been served grand jury subpoenas from the Justice Department threatening a criminal indictment. In a forceful written and video statement released Sunday, Powell said the action was related to his June congressional testimony on ongoing renovations of the Fed’s headquarters.

In an interview with NBC News on Sunday, Trump denied having any knowledge of the investigation into the central bank.

“While there has been minimal market reaction, the situation raises concerns about the potential erosion of the Federal Reserve’s institutional independence and market stability, prompting bipartisan reactions from lawmakers and economists alike,” said Jason Pride at Glenmede.

Importantly, as of now, no criminal charges have been filed, Pride noted, but the situation deserves ongoing monitoring given the risk it introduces to perceived Fed independence, long-term inflation expectations, and long-term rates.

“Whether the White House’s latest attempt to influence Fed policy succeeds or not is key to the medium- and long-term market implications,” said Thierry Wizman at Macquarie Group. “But if it does succeed, we foresee a weaker dollar, a steeper yield curve, higher long-term yields, and higher inflation breakevens as modal outcomes, all else equal.”