Index Update: The Australian sharemarket ended lower on Thursday after signals from US Federal Reserve policymakers pointing to a possible rate hike later this year weighed on metals prices and mining stocks. The S&P/ASX 200 declined 55.20 points, or 0.62%, to close at 8,911.10. Over the last five days, the index has gained 3.22% and is currently 3.17% off of its 52-week high. Sector performance was mixed, with eight of 11 sectors finishing in negative territory. Information Technology (-1.36%), Materials (-1.27%) and Energy (-1.16%) led declines, while Consumer Staples rose 0.73%, making it the best-performing sector.

Macro Update: The US Federal Reserve kept its benchmark interest rate unchanged at 3.50%-3.75%, but according to news from Reuters, updated projections showed that nine of 19 policymakers now expect at least one rate hike in 2026 amid concerns over inflation linked to higher oil prices following the Iran war. The latest “dot plot” indicated six officials see more than one quarter-point increase. Fed policymakers also raised their inflation forecasts while lowering expectations for economic growth, reflecting a more cautious outlook for the US economy.

Top Market Movers: Among the top gainers, Megaport (ASX: MP1) rose AUD 0.910, or 4.589%, to AUD 20.740. Mesoblast (ASX: MSB) advanced AUD 0.085, or 4.303%, to AUD 2.060, while 4DMedical (ASX: 4DX) gained AUD 0.150, or 4.043%, to AUD 3.860. On the losing side, Ora Banda Mining (ASX: OBM) fell AUD 0.105, or 7.527%, to AUD 1.290. Pantoro Gold (ASX: PNR) declined AUD 0.200, or 6.558%, to AUD 2.850, and Bellevue Gold (ASX: BGL) dropped AUD 0.090, or 5.522%, to AUD 1.540.

Commodity Update: The U.S. dollar remained near a more than two-month high on Thursday as expectations of additional Federal Reserve rate hikes strengthened, adding pressure on major currencies and pushing the Japanese yen closer to levels that have previously prompted intervention concerns. In the commodities market, gold declined by 1.06% to USD 4,334.90 per ounce, while silver fell 2.48% to USD 69.01 per ounce. Copper also weakened by 1.09% to USD 13,683.00 per tonne. Meanwhile, Brent crude oil fell 1.00% to USD 78.73 per barrel as investors evaluated the impact of the newly announced U.S.-Iran peace accord alongside concerns about a potential global supply surplus.

Our Stance: The Australian sharemarket retreated on Thursday, with the S&P/ASX 200 falling 0.62% to 8,911.10 as renewed concerns over US monetary policy weighed on sentiment. Technology, materials and energy stocks led sector declines, while consumer staples outperformed. In the US, the Federal Reserve kept rates unchanged but projections showed growing support among policymakers for additional tightening, alongside higher inflation expectations and weaker growth forecasts. Commodity prices softened, with gold, silver, copper and Brent crude all trading lower. Megaport (ASX: MP1), Mesoblast (ASX: MSB) and 4DMedical (ASX: 4DX) led gains, while gold miners underperformed. With policy uncertainty resurfacing and commodity prices under pressure, markets may remain cautious in the near term.

The S&P/ASX 200 declined 55.20 points in the latest trading session, resulting in the formation of a bearish candlestick pattern and reflecting some near-term weakness in market sentiment. Despite the pullback, the broader technical outlook remains constructive. The index continues to trade comfortably above its 21-day Simple Moving Average (SMA), which is acting as a key dynamic support level and reinforcing the prevailing upward trend. Immediate support is located near the 8,840.60 level, and maintaining trade above this zone should help preserve the current bullish market structure. A sustained hold above support could encourage renewed buying interest, while a decisive break below this level may trigger increased selling pressure and a deeper corrective move.