Fed Hawkish Surprise Hits ASX; Energy, Soul Patts Buck Selloff

The Australian sharemarket slipped half a percent today after the U.S. Federal Reserve surprised markets with a hawkish stance. Traders are now pricing in a possible rate hike by October, a shift that hit rate-sensitive sectors hard.

Technology stocks led the losses. WiseTech fell 3.4%, Xero dropped 3.2%. The big four banks weakened too: NAB down 1.5%, Westpac off 1.4%, Commonwealth Bank losing 0.6%. Gold miners also sold off as bullion priced in higher-for-longer U.S. rates. Westgold Resources fell 3.3%, Ramelius Resources shed 3.2%.

Energy was the day's lone bright spot. Woodside gained 1% despite a pullback in overnight oil. Investors apparently viewed the dip as a buying opportunity, with crude supply still tight.

Two deal-driven names stood out. Challenger rose slightly after its funds management arm, Fidante, agreed to merge with Channel Capital, creating a group with roughly $150 billion in assets under management. Washington H. Soul Pattinson jumped 1.8% after striking a nearly $2 billion deal to sell its stake in Brickworks' industrial property trusts to Goodman Group, freeing up capital for future investments.

Infrastructure investor Infratil fell 1.3%, a move the market attributed to former Woolworths chief Brad Banducci joining its board – a name that historically has not been a positive signal for share prices.

The broader picture is a market that has pivoted back to interest rate risk. After several sessions of optimism tied to easing geopolitical tensions, the Fed's message on inflation has rattled the ASX. That reversal may not yet be fully priced into rate-sensitive positions.