The Australian sharemarket is 0.5 per cent lower at 7040.2 before noon after an afternoon swoon saw Wall Street finish its session lower.
Energy is the only sector in the black with the property, tech, health and consumer discretionary sectors all down more than one per cent.
Wall Street’s early rally dissolved by the afternoon.Credit:Bloomberg
Shares in insurance giant IAG are 1 per cent higher after it reported its results while ResMed shares are 2 per cent lower after releasing its results in the US overnight.
The S&P 500 closed 0.1 per cent lower after having been up 1.1 per cent in the early going. The Nasdaq fell 0.6 per cent, while the Dow Jones Industrial Average eked out a 0.1 per cent gain.
The indexes got a big boost early on following a report showing inflation at the wholesale level slowed more than economists expected last month. The report, which came a day after a cooler-than-expected reading on inflation at the consumer level, bolstered hopes among investors that inflation may be close to a peak and that the Federal Reserve will be less aggressive about raising interest rates than feared.
Even so, the morning rally didn’t hold. The selling coincided with a sharp upward move in bond yields and rising energy prices, which have been a central component of higher inflation.
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“People stepped back and the inflation outlook isn’t that much different than what it was before,” said Willie Delwiche, investment strategist at All Star Charts. “There’s still a lot of work for the Fed to do. Maybe a little bit too much short-term euphoria kind of got in the market.”
Some Fed officials also made comments after Wednesday’s inflation report suggesting their battle against rising prices is far from over.