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Index Update: Australian equities closed lower on Friday, weighed down by losses in the Financials, Health Care, and REIT sectors. The S&P/ASX 200 dropped 36.60 points, or 0.43%, to finish at 8,514.20. Although the index ended the week nearly flat, it remains 1.45% below its 52-week high. Sector performance was mixed, with eight of the eleven sectors declining. Materials outperformed, rising 2.27% on Friday and posting a 1.78% gain over the week.

Macro Update: The U.S. economy contracted at an annualised rate of 0.5% between January and March, marking the first decline in three years, according to Thursday’s Commerce Department report. The contraction followed 2.4% growth in the previous quarter and was largely attributed to a surge in imports, as businesses and consumers accelerated purchases of foreign goods ahead of anticipated tariffs under President Donald Trump’s trade policies. The import spike temporarily disrupted domestic production and weighed on overall economic activity.

Top Market Movers: On the ASX, Alcoa Corporation (ASX:AAI) surged 7.719% to AUD 45.910, leading gains, while Neuren Pharmaceuticals Limited (ASX:NEU) rose 6.686% to AUD 14.200, and Capstone Copper Corp. (ASX:CSC) advanced 6.651% to AUD 9.460. Among the top losers, Reece Limited (ASX:REH), APA Group (ASX:APA), and Flight Centre Travel Group Limited (ASX:FLT) posted notable declines of 18.664%, 4.010%, and 4.000%, respectively, weighing on overall market sentiment.

Commodity Update: The dollar drifted near 3.5-year lows against the euro and pound on Friday, pressured by expectations of deeper U.S. rate cuts and uncertainty over trade deals ahead of July tariffs. Gold slipped 1.00% to USD 3,314.70, silver fell 0.55% to USD 36.45, and copper eased 0.17% to USD 9,897.10. Brent crude rose 0.50% to USD 68.07, supported by firm U.S. demand despite fading Middle East supply concerns.

Our Stance: Australian equities ended lower Friday, dragged down by losses in key sectors despite gains in Materials, reflecting selective investor confidence linked to commodity strength. Meanwhile, the U.S. economy’s 0.5% contraction has stirred global growth concerns amid ongoing tariff uncertainties. Commodities finished mixed, underscoring cautious sentiment. Markets are likely to remain volatile as investors await clearer signals on U.S. policy and economic conditions.

The S&P/ASX 200 index had a challenging trading session, ending down by 36.60 points. This drop was accompanied by the formation of a bearish candlestick pattern and higher trading volume. However, it's important to note that the index is still trading above its 50-period Simple Moving Average (SMA), which is now a critical support level. This provides a glimmer of hope for a potential bounce, as the SMA has historically served as a key area for price stabilization. A sustained move below the 50-period SMA could signal further weakness, but for now, it remains a pivotal line of defense. On the daily chart, there is clear support around the 8,430.50 level, making it an important threshold to watch. If the index manages to hold above this level, it could help prevent deeper declines and reinforce the potential for a recovery, supporting the case for future gains.