President Donald Trump has triggered more economic fear after threatening to sack “loser” central bank boss Jerome Powell.
All three US equity indexes lurched more than two per cent lower, while bonds and the US dollar also tumbled.
Trump ramped up pressure on the Federal Reserve Chair to lower interest rates.
The president claimed the US economy was headed for a slowdown “unless Mr Too Late, a major loser, lowers interest rates NOW”.
The outburst in a Truth Social post heightened fears over the central bank’s autonomy.
“Countries that have an independent central bank grow faster, have lower inflation; they have better economic outcomes for their people,” said Jed Ellerbroek, portfolio manager at Argent Capital Management in St Louis.
“And politicians trying to influence the Fed is a really bad idea, and it’s very scary for the market.”
Australian shares edged slightly lower as investors fled from US equities to the safe haven of gold following the comments.
After falling almost one per cent in early trading, goldminers led a recovery in the S&P/ASX200 to be down 8.5 points, or 0.11 per cent, to 7810.6 by noon on Tuesday.
The broader All Ordinaries fell 13.6 points, or 0.17 per cent, to 8008.3.
Australian investors initially took their lead from risk-off sentiment on Wall Street overnight.
Gold prices surged as investors on a “buyer’s strike” of US equities sought a safe haven, said Moomoo Australia market strategist Jessica Amir.
“Investor sentiment is sour, evidenced in burgeoning cash balances and hoarding of gold,” she said.
“That’s a good thing for those investors as gold continues to surge to highs, charging above $US3400 — taking this year’s gains to 30 per cent — with more room to run.”
Australian-listed goldminers soared, helping the materials sector post a 0.08 per cent gain.
Goldminers Northern Star (2.4 per cent), Evolution (3.8 per cent) and St Barbara (11.5 per cent) were among the best performers.
The rest of the big cap miners were mixed, with BHP and Rio Tinto up 0.2 per cent, while Fortescue Metals slipped 0.5 per cent.
Of the remaining 10 industrial sectors on the ASX, consumer staples (0.09 per cent) and financials (0.49 per cent) also gained while the rest turned lower.
Macquarie Group climbed 1.1 per cent to $181.94 after the financial conglomerate announced it would sell off its North American and European public investments business to Japanese investment bank Nomura.
The $2.8 billion deal will see Macquarie’s asset management arm relinquish its international equities, fixed income, and multi-asset investments as it concentrates its focus on the Australian market.
CBA led the big four banks, climbing 1.3 per cent, while Westpac rose 0.6 per cent and NAB firmed 0.1 per cent. ANZ slipped 0.3 per cent.
Energy and IT stocks were the biggest losers.
Uranium miner Deep Yellow slumped 6.6 per cent after announcing it would delay development of its flagship Tumas project in Namibia due to depressed uranium prices.
“We are at an extraordinary stage in the uranium supply sector,” said CEO John Borshoff.
“We have a situation where the long-term uranium market is essentially broken.
“This is due to more than a decade of sector inactivity, persistently depressed uranium prices, and utility offtake contracting practices which are yet to support the development of greenfields uranium production.”
The Australian dollar climbed to its highest level against the greenback since December following the US sell-off over the weekend.
It was buying 64.15 US cents, up from 63.41 US cents at 5pm on Thursday.
-with AAP
