ASX200 Slumps Amid Inflation Fears and Interest Rate Hopes

The Australian stock market experienced a 1% drop on Thursday, closing at 9,038 points. The Reserve Bank of Australia's potential decision to tighten monetary policy next month after an unexpectedly high inflation print contributed to the decline.

The four major banks have now increased their prediction for another interest rate hike this year following three increases already in 2026. Retail trade and consumer stocks were among the sectors that experienced losses, while non-energy minerals and financials also saw declines.

However, a surge in US futures after Nvidia's impressive earnings report temporarily limited local sentiment. The company reported a significant increase in Q2 revenue, more than doubling expectations.

In Australia, household spending rose for the third consecutive month in July. Notable stocks like BHP Group and Rio Tinto fell by 1.5% and 0.5%, respectively, while Westfarmers dropped 4.6%. In contrast, Qantas Airways saw a 4.8% increase after issuing positive revenue guidance.