ASX to rise, US Treasury Secretary Scott Bessent says China tariff war is unsustainable

The Australian sharemarket rebounded on Wednesday, buoyed by a rally on Wall Street and as US President Donald Trump said tariffs on China would be wound down from the current rate of 145 per cent.

The S&P/ASX 200 Index rose 1.3 per cent, or by 103.8 points, to 7920.5 at the market close as all 11 sectors finished higher, led by energy.

On Wall Street, stocks rallied and gold retreated after Treasury Secretary Scott Bessent called Washington’s tariff stand-off with China unsustainable and said he expected the situation to de-escalate. Trump echoed the sentiment after the market close, and said the final tariff rate on China would not be “anywhere near” the current level.

US futures point to further gains overnight. Tesla’s shares rallied more than 5 per cent in extended trading as investors shrugged off disappointing earnings and took heart from a pledge by Elon Musk to dedicate more time to the electric carmaker.

More upside?

IG analyst Tony Sycamore expects some “moderation in volatility” for the ASX 200 after Trump and Bessent signalled a less aggressive approach to tariffs.

“[The White House] is being mindful that they can’t blow up the market, but it doesn’t make sense the ASX 200 goes roaring back to record highs – not for some time yet,” he said.

Australia’s rate-sensitive technology sector tracked its US counterparts higher. Software giant WiseTech jumped 5.5 per cent to $84.45 and data centre stock NextDC rose 5 per cent to $11. Energy and mining stocks were also well bid, tracking iron ore and crude prices, sending BHP up 3.3 per cent to $37.72.

Commonwealth Bank dropped 2.5 per cent to $163.77 as investors booked profits after Australia’s largest bank jumped 4 per cent to a record high on Tuesday.

Stocks in focus

Profit takers also stepped in on gold stocks after spot gold briefly touched $US3500 an ounce. Ramelius Resources sank 14.6 per cent to $2.51 – the largest loss on the ASX 200. Separately, West Australian gold miner Capricorn Metals slid 11.4 per cent to $9.01 after it stood down its chief executive, who has been charged with aggravated assault.

Paladin Energy was the ASX 200’s best performer, leaping more than 24.6 per cent to $4.96 and lifting uranium stocks after its Langer Heinrich mine notched a record quarterly output result.

And Cettire plunged 24.43 per cent to 49.5¢ after reporting weak demand from US customers owing to the impact of Trump’s tariffs, and after earnings fell.