This Week in Markets: Tuesday 29 September 2026

The bond market kept the pressure on, and gold took the hit. The interest rate on the US 10-year government bond rose 7.9 basis points (0.079 of a percentage point) to 5.24% on Monday night, a 19-year high, after touching 5.27%. The 30-year rate rose to 5.55%, and the Australian 10-year rose 5.3 basis points to 5.42%. Rates rose in London (5.42%) and Germany (3.65%) too. Markets now put a 70% chance on a US central bank rise at the 28 October meeting, up from 18% a month ago. Fed Governor Lisa Cook said AI productivity gains "won't arrive" in time to offset this year's inflation pressure.

Shares gave ground. US shares (S&P 500) fell 0.77% to 7,684, US tech shares (Nasdaq) 0.92% to 26,820 and the Dow 347 points to 51,482. Australia sat still. Australian shares (ASX 200) were down 8 points at midday today, with the Reserve Bank's decision due at 2:30pm. The market puts a 90% chance on a 25 basis point rise to a cash rate of 4.60%.

Bonds did the damage. The US 10-year rate rose to 5.24%, the 2-year to 4.93% and the 30-year to 5.55% in the biggest Treasury sell-off since the April 2025 tariff turmoil. Deutsche Bank calculates that only 10 basis points of the 10-year's 97 basis point rise this year came from higher inflation expectations. The rest is real yields, the return after inflation, which is what lands on share valuations. Mohamed El-Erian says "we're not going back" to lower rates, while Jim Bianco turned bullish on US bonds for the first time in six years. Both cannot be right.

Tech led the selling. The Magnificent Seven fell 1.5%, with Meta (-4.8%) and Tesla (-3.9%) the worst, after Meta's 36% September run. The chip index fell 1.6%: Qualcomm (-7.2%), Intel (-5.7%), AMD (-3.6%) and Micron (-2.6%) all lower ahead of Micron's results on Thursday morning. Nvidia (+1.7%) bucked it after lifting its share buyback by US$150 billion to US$235 billion, the largest single buyback authorisation on record. Software kept sliding, with HubSpot (-5.1%), Atlassian (-4.9%) and ServiceNow (-3.1%) lower. Boeing (-6.9%) was the main drag on the Dow after the FAA delayed certification of the 737 MAX 10 over a software issue. Breadth was poor: 28 S&P 500 stocks hit 52-week lows against 3 new highs.

Monday was listless. The ASX 200 rose 15 points (0.2%) to 8,680 in quiet trade ahead of the Reserve Bank. The banks were firm, with Macquarie (MQG +2.3%) and CBA (CBA +0.5%) higher, and CSL (CSL +2.8%) kept pushing up. The resources sector was weak on iron ore worries, and gold miners fell with Evolution (EVN -3.0%) and Newmont (NEM -2.4%) lower. Karoon Energy (KAR -12.9%) had the worst day after cutting production guidance. Northern Star (NST +6.2%) rallied on rejecting Gold Fields' takeover proposal. Pinnacle (PNI -2.0%) fell after three ASX-listed private credit funds were suspended on valuation concerns.

As at midday today, the index is down 8 points, or 0.09%, with five of eleven sectors higher. Technology is up 4.25% on two big stocks: Megaport (MP1 +15.8%) won three AI contracts worth nearly $1 billion and lifted its FY27 earnings margin guidance to 42% to 44%, and Codan (CDA +20.2%) guided to a first-half profit of at least $160 million, double the $71.2 million of a year ago, on demand for drone components. Energy is the weakest sector (-1.49%) despite higher oil, with Karoon (KAR -8.5%) leading it down, and property trusts are down 1.21% as rates rise. The Big Four are all lower, with CBA (CBA -1.2%) the worst, and August household spending came in flat against the forecast 0.4% rise. Past performance is not a reliable indicator of future performance.

Gold was the casualty. It fell 3.5% overnight to about US$4,135 an ounce, an eight-week low and its worst session in more than three months, as a firmer US dollar and higher rates hit an asset that pays no interest. Silver fell 5.5% and platinum 3.0%. Gold stocks were sold hard: the US gold miners fund (GDX) fell 5.4%, Gold Fields 12.9% and Newmont 4.4%. At midday today gold was up 0.24% in Australia, steadying near its lows.

Copper fell 2.4% to a ten-day low on weak Chinese industrial profits, and lithium fell 4.3%. Brent crude rose 0.7% to US$98.60 a barrel and WTI 0.5% to US$93.30, both well below the highs hit in Asia after Trump rejected Iran's latest proposal. Iron ore is near one-month lows at about US$94.40 a tonne, a fall of 0.3%. The Australian dollar is flat at about 70.2 US cents, near two-month lows, and the US dollar index is up 0.2% to 101.2.

The AI trade is splitting in two. The builders are still winning contracts: Megaport (MP1 +15.8% at midday) locked in nearly $1 billion of new AI infrastructure deals, and Nvidia is spending US$150 billion more on its own shares. The names that sell the AI are being sold. Arm fell 9% in the US and Samsung (-5.4%) and SK Hynix (-5.0%) fell in Asia after reports that OpenAI paused training of its most capable models. MongoDB (-18.5%) fell after its chief executive quit to join Meta.

Data centres are also meeting resistance at home. Goodman Group (GMG -1.5% on Monday, -1.7% at midday today) withdrew its $1.2 billion Sydney data centre after the NSW planning rules changed, with data centres now 80% of its $20 billion work in progress. Cochlear (COH) received a class action over its FY26 profit forecast, which it says it will defend. Healius (HLS +10.7% at midday) is on takeover speculation after selling Agilex Biolabs. The private credit story is one we are watching closely: three ASX-listed funds suspended on valuation concerns on Monday.

Oil is following the Iran headlines. Trump rejected Iran's latest proposal to reopen the Strait of Hormuz, then said the US would win the war "very soon", and reports later said Iran had agreed to halt uranium enrichment in exchange for sanctions relief, with Qatari-led talks due this week. Iranian officials see a high chance of escalation after the 3 November US midterm elections. Saudi Arabia's East-West pipeline, which bypasses Hormuz, is back at 3.5 million barrels a day after repairs, half its capacity. Trump is also seriously considering a ban on diesel exports, with US diesel exports at a record 2 million barrels a day.

On trade, the White House and China released lists of about US$30 billion of goods each will cut tariffs on: 77 Chinese products and 1,619 American ones. China says about 90% of the goods covered will move to standard tariff rates. Chinese shares fell sharply, with the Shanghai index down 2.96% at midday today.

Tuesday 29 September. The Reserve Bank decides at 2:30pm. A rise to 4.60% is priced at a 90% chance, and RBC, ANZ, UBS and HSBC all expect another rise in November.

Wednesday 30 September. Australian inflation for August at 11:30am, a day after the decision.

Thursday 1 October. Australian trade figures, US inflation figures and Micron's results early in the morning, then six US central bank governors speak that night.

Friday 2 October. The US jobs report, the last big test before the US central bank meets on 28 October.