Central bankers have united to defend Powell, but many in the markets believe the intense pressure on the Fed is still likely to result in interest rates being lower than otherwise. Trump has repeatedly attacked the Fed and Powell – whom he appointed during his first term – and called for lower rates.
The price of gold hit new record highs this week.Credit: Bloomberg
AMP deputy chief economist Diana Mousina said that if Trump appoints a Fed chair who is more sympathetic to his views, interest rates will probably be lower than they would have been under Powell.
“The pressure on the Fed from the president probably means that interest rates are likely to be reasonably lower this year,” Mousina said. “We are still sort of in this sweet spot for markets,” she said.
Another force behind the solid performance on the ASX this year, despite an uncertain global backdrop, is the strength in commodities. This is reflected in the performance of BHP – which has been edging closer to overtaking Commonwealth Bank as the largest stock on the ASX.
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Senior investment advisor at Shaw and Partners, Adam Dawes, noted the importance of potential US rate cuts on the market, while adding that commodities – in particular gold – were often seen as attractive to investors in a volatile environment.
“Gold has continued to go from strength to strength, and I think that as long as Trump is in power, it will continue to, really, and that’s due to the uncertainty he brings to the role,” he said.
On Friday, the S&P/ASX 200 closed 0.5 per cent higher at 8903.90, to extend its winning streak after Wall Street rose overnight amid a slump in oil prices and a rise in US technology companies.
Mining giant BHP gave up some of its recent gains, falling 0.8 per cent, while rivals Rio Tinto (up 0.7 per cent) and Fortescue (up 0.3 per cent) both rose.
Gold miners were mixed, with Newmont (up 0.7 per cent) and Evolution Mining (up 0.4 per cent) climbing while Northern Star (down 1 per cent) fell.
The energy sector was weaker after oil prices fell overnight, with Woodside (down 1.4 per cent), Santos (down 1.6 per cent) and Ampol (down 1 per cent) all losing ground.
Major banks climbed, as investors took a more positive approach to the sector after some have “rotated” out of banks into the mining giants during the early trading sessions of 2026. Commonwealth Bank, the biggest stock on the market, rose 0.5 per cent, Westpac gained 1.8 per cent, National Australia Bank rose 0.7 per cent, and ANZ Bank rose 0.5 per cent.
James Hardie, a building materials business, rose 2 per cent after announcing plans to close two manufacturing facilities in the United States as part of a push to lower costs and improve its productivity.
Technology was the strongest sector overall, after US tech shares rallied overnight. Logistics software business Wisetech rose 0.4 per cent, accounting software provider Xero rose 0.5 per cent, and data centre business NextDC was up 3.5 per cent.
