Daily Market Update: 11 December 2025

Australian market slips as RBA signals possible 2026 rate hike

The benchmark S&P/ASX 200 Index (ASX: XJO) edged down 0.1 per cent to 8,579.40 on Wednesday, with broad-based sector weakness offset by strength in materials. Investor sentiment softened after RBA governor Michele Bullock indicated that further rate relief is unlikely following the bank’s decision to hold the cash rate at 3.6 per cent. UBS brought forward its expectations for the next rate increase to the second quarter of 2026, noting that the prospect of higher domestic rates — combined with expected US cuts — is beginning to be reflected in equity pricing. Market participants also pointed to the potential for a stronger Australian dollar under this scenario, adding support to resource names.

Materials lead gains as tech lags

Materials stocks outperformed, rising 1.3 per cent as gold and silver prices pushed higher and lifted heavyweights including Newmont (ASX: NEM), Northern Star (ASX: NST) and Sun Silver (ASX: SS1). The gains were strong enough to cushion losses across most other sectors, with nine of the eleven ending in the red. Technology names were the weakest performers, with TechnologyOne (ASX: TNE) and WiseTech Global (ASX: WTC) both declining as rate-sensitive growth stocks came under pressure. DroneShield (ASX: DRO) was the standout on the index, soaring 16.2 per cent as retail investors returned to the defence stock after its recent sell-off. Corporate updates were also in focus, with Ramelius Resources (ASX: RMS), St Barbara (ASX: SBM), 4DMedical (ASX: 4DX) and Symal Group (ASX: SYM) all advancing on deal activity and operational announcements, while Myer (ASX: MYR) slipped despite unveiling a new partnership with Topshop aimed at attracting younger shoppers.

Wall Street climbs after Fed cut and dovish Powell tone

US equity markets finished higher after the Federal Reserve delivered a widely expected 25-basis-point rate cut and signalled one additional cut next year, consistent with its September guidance. Chair Jerome Powell reinforced a dovish stance, suggesting the debate is now centred on whether to pause or ease “a little” or “more than a little” further, while effectively ruling out another rate hike. Traders increased bets on further easing, with markets now pricing a 68 per cent chance of two or more cuts in the year ahead. The Dow Jones rose 1.1 per cent, the S&P 500 added 0.7 per cent, and the Nasdaq recovered to finish 0.4 per cent higher. Industrials led gains, supported by Amazon (NASDAQ: AMZN) after outlining plans to invest $35 billion in India and a strong session for JPMorgan (NYSE: JPM), while Microsoft (NASDAQ: MSFT) weighed on the broader technology sector after announcing a $17.5 billion investment commitment in India.