Iron ore falls, rate cut uncertainty grips markets

US stocks struggled last week as concerns over inflation and US president-elect Donald Trump’s tariff plans weighed on sentiment. The Dow slipped 0.2%, the S&P 500 was flat, and the Nasdaq gained 0.1%.

Investors remain focused on the Federal Reserve’s upcoming meeting this Wednesday, where a 25-basis-point rate cut is widely expected. However, analysts are warning that the Fed may signal a slower pace of cuts in 2025.

In US company news, Broadcom surged 24.4%, hitting a market cap of over $1 trillion after forecasting a surge in AI product sales. Tesla continued its rally, climbing 4.3%, while Nvidia slipped 2.3%, capping off an 8% decline over the past month.

Meanwhile, iron ore prices dropped 1.2% over the weekend as China’s Central Economic Work Conference failed to deliver the major stimulus investors were hoping for. Traders will be watching this week’s key Chinese economic data for signs of support, as mining stocks may face renewed pressure.

Turning to Australia, there's growing uncertainty around the Reserve Bank of Australia’s next move. Last week’s surprise drop in unemployment to 3.9% has reduced the chance of a February rate cut.

The ASX is set to open lower, with futures pointing to a 39 point or 0.47% fall.

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap, Marketech.

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