ASX 200 Rises as Fed Holds Rates While Retail Stocks Slump

The S&P/ASX 200 Index rose 28.6 points, or 0.3 per cent, to 8875.9 as of 10:03 am AEDT on Wednesday, following a decision by the US Federal Reserve to maintain current interest rates. While nine of the 11 sectors opened in the green, led by real estate, the benchmark index faced headwinds from a slump in consumer discretionary stocks.

The gains in Australian shares tracked a positive trend on Wall Street, where the S&P 500 rose 0.28% to 7,743.98 and the Nasdaq Composite gained 0.27% to 26,549.85. The Dow Jones Industrial Average climbed 97.53 points, or 0.19%, to 52,475.10. These results marked the third session of gains for all three US benchmarks.

Fed Holds Rates as Inflation Remains Too High

The US Federal Reserve held its benchmark interest rate steady at 3.75% to 4%, a move that follows a quarter-point increase in September. Despite the hold, Fed Chairman Kevin Warsh told reporters that inflation remains too high.

Fed Holds Rates With a Hawkish Edge

Warsh provided limited guidance regarding future policy, but traders are currently pricing in a rate hike at the central bank’s next meeting in December. This anticipation of further tightening, combined with rising oil prices, has contributed to higher US Treasury yields and persistent inflation concerns.

Mixed Results for Big Tech and AI

Sentiment regarding artificial intelligence spending was driven by divergent results from two US technology giants reported in extended trading.

Federal Reserve Chairman Kevin Warsh speaks after Fed holds interest rates steady — 10/28/2026

Microsoft: Shares rose more than 4 per cent after its cloud division exceeded earnings expectations.
Alphabet: The parent company of Google saw shares drop more than 6 per cent. The decline followed reports of a higher cash burn than analysts had expected, attributed to heavy spending to increase capacity for its cloud business.

Prior to these announcements, Wall Street was supported by a rally in semiconductor shares. South Korea’s SK Hynix reported record quarterly profit, which drove its US-listed shares up 13%. Other gains included Micron Technology, which rose nearly 6%, Arm Holdings at 4%, and AMD and Marvell Technology, which each advanced approximately 3%. Oracle also surged nearly 11% after outlining limits on future fundraising and forecasting revenue of US$225 billion by fiscal 2030.

Local Corporate Performance

In Australia, the positive open was tempered by reports from retail giants Wesfarmers, JB Hi-Fi, and Super Retail, which all reported slowing sales across their businesses.

ASX 200 Rises as Fed Holds Rates While Retail Stocks Slump — Photo: Yahoo Finance Australia

Other corporate updates included:

PLS Group: Reported September quarter production of 267,600 tonnes of spodumene concentrate and sales of 223,600 tonnes. This generated AU$563 million in revenue at a realized price of $1,809 per tonne.
Antam: Reported revenue of 88.481 trillion rupiah and earnings per share of 367.78 Indonesian rupiah for the first nine months, an increase over the 72.028 trillion rupiah in revenue and 248.62 rupiah per share earnings from the same period last year.

Market participants remain focused on the sustainability of technology sector growth and the implications of AI infrastructure investment. It is unclear how the Federal Reserve will handle persistent inflation pressures and the strength of the US economy heading into December.