ASX 200 declines amid Trump’s Fed actions and tariff pressures

The Australia 200 trades  51 points (-0.58%) lower at 8920 as of 2.25pm  AEST.

Trump’s decisions drive ASX200 market shifts

The Australia 200 (ASX 200) has slipped lower in trading today as President Trump returned to influence global markets with renewed tariff threats and announced the firing of Federal Reserve (Fed) Governor Lisa Cook.

The move to dismiss Cook follows Trump’s relentless pressure on Fed Chair Jerome Powell to cut interest rates, who finally agreed last week, announcing a willingness to cut rates due to labour market softness.

The intended removal of Cook and Powell’s surprising pivot have reignited concerns about the Fed’s independence and its ability to maintain impartial monetary policy free from political influence. Such developments could potentially trigger a rerun of the 'sell US assets' theme that emerged earlier this year.

US tech taxes and market ripple effects

Trump also threatened 'substantial additional tariffs' on nations imposing digital taxes on United States (US) tech giants like Alphabet, Meta, Apple, and Amazon. Trump argued that these taxes, imposed by many European countries, 'harm or discriminate against American technology.'

The impact of these geopolitical developments has largely overshadowed today’s earnings releases from Fortescue and Coles.

Australia 200 stocks

Financial sector

The ASX 200 financial sector has fallen again today, extending yesterday’s decline, despite the US banking index rising 3.22% on Friday. Extending the timeframe, the ASX 200 financial sector is trading at the same levels seen two months ago, despite the overall index having risen nearly 5% in that period.

• ANZ declined 0.84% to $33.11
• Commonwealth Bank of Australia slipped 0.72% to $169.08
• Westpac fell 0.31% to $38.17
• National Australia Bank bucked the trend, gaining 0.41% to $41.88.

Materials sector

Fortescue Metals reported financial year (FY) 2025 net profit after tax (NPAT) of US$3.37 billion, a 41% decline from last year’s US$5.7 billion. The profit fall was largely expected due to weaker Chinese demand and lower iron ore prices. 

• Fortescue dropped 2.60% to $19.47
• Mineral Resources fell 4.81% to $35.26 ahead of its earnings report tomorrow
• BHP slipped 1.16% to $42.65
• Rio Tinto declined 0.65% to $114.67.

Retail sector

Coles reported a 1.8% increase in sales to $44.5 billion. The company emphasised its focus on 'fewer but deeper promotions,' boosting both sales and profits. It also raised its dividend to $0.32 per share, a move that bolstered investor confidence. 

• Coles soared 9.07% to $22.61
• Woolworths gained 2.88% to $33.55.

Australia 200 technical analysis

After spending the last two weeks of July consolidating its gains above 8600, the ASX 200 has continued to march higher in August, hitting a fresh record high yesterday at 9054.5, some 25% above its April 7169 low and 105% above its Covid-19-crash 4402 low.

With the relative strength index (RSI) on the weekly chart now at its most overbought level since August 2021 and following the formation of a 'loss of momentum' daily candle yesterday, we are becoming increasingly cautious about the ASX 200’s upside prospects from here.

If the ASX 200 were to fall below short-term support at around 8800, it would be an initial indication that a medium-term high is in place and that a deeper pullback initially towards 8620 - 8600 is underway, with a scope to 8400.

Australia 200 daily chart

• _{Source: TradingView. The figures stated are as of 26 August 2025. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.}