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The US markets were sharply sold off across the key indices on Wednesday after the Federal Reserve moved to raise the country’s cash rate by 75-basis points for a fourth straight month, in a bid to tackle the nation’s 40-year high inflation. Federal Chair Jerome Powell said there were ‘no grounds for complacency’ but also said the chances of the US economy achieving a ‘soft landing’ and avoiding recession as it fights off inflation have ‘narrowed’. The Dow Jones industrials index fell 1.55%, the S&P500 shed 2.5% and the tech-heavy Nasdaq plunged 3.36%. Powell also indicated the Fed expects to raise interest rates to 4.4% by the end of this year.

Tech stocks tumbled on Wednesday, with Alphabet, Apple and Microsoft each slumping more than 3%. Trading volumes surged on Wednesday after the Fed handed down its latest interest rate hike with FactSet data showing volume was fairly muted ahead of the decision, with the widely followed SPDR S&P500 ETF which tracks the benchmark index, traded about 100.3m shares with roughly 20 minutes left in the session. The midweek global sell-off extended into Europe with Germany’s DAX falling 0.61%, the French CAC losing 0.81% and, in the UK, the FTSE100 closed 0.58% lower, as investors focus on the Fed’s aggressive rate hike moves.

What to watch today:

• Ahead of the local trading session the SPI futures are expecting the ASX to open 1.59% lower amid the global market sell-off overnight.
• In commodities, it’s a mixed bag this morning with Brent crude oil trading 0.79% higher at US$95.40 per barrel, while gold is down 0.64% at US$1,637 per ounce, and iron ore is down 0.61% at US$81.50 per tonne. The Aussie dollar has weakened overnight to buy 63.55 US cents, 55.91 British Pence, 93.90 Japanese yen and 1 dollar and 9 New Zealand cents.
• Australia’s trade balance data will be released at 11:30am AEDT today, with the market expecting a rebound in trade surplus to $8.85 billion.

 Trading Ideas:

• Trading Central has identified a bullish signal on Bellevue Gold (ASX:BGL) following the formation of a pattern over a period of 40-days which is roughly the same amount of time the share price may rise from the close of $0.77 to the range of $0.91 – $0.95 according to standard principles of technical analysis.
• Trading Central has also identified a bullish signal on Energy Resources (ASX:ERA) of Australia following the formation of a pattern over a period of 38-days which is roughly the same amount of time the share price may rise from the close of $0.22 to the range of $0.26 – $0.28 according to standard principles of technical analysis.