Evening Wrap: ASX 200 reverses course on tariff inflation worries; banks take a hit, rare earths rally

The S&P/ASX 200 closed 68.5 points lower, down 0.79%.

In a nutshell:

• ASX 200 suffers biggest decline in more than two months

• Followed Wall Street lower, after US inflation data showed tariffs impacting prices

• Banks bore the brunt of the selling pressure

Let's dive in.

ASX 200 Session Chart

ASX 200 closed down 68.5 points (Source: Market Index)

Markets

• The ASX 200 tumbled from the outset and bobbled along the bottom for the rest of the session.

• Financials (-1.36%) were hardest hit, led lower by banks; NAB down 3.4% despite the board reiterating support for under-fire CEO Andrew Irvine, Westpac dropped 1.5%, CBA 1.2%, and ANZ 0.6%.

• Materials (-1.16%) the other end of the barbell - also took a hit despite iron ore rising more than 1% in Singapore, to US$100.10 a tonne. BHP fell 0.7%, while Rio Tinto managed a modest 0.2% gain after strong quarterly production results.

• Elsewhere in materials, Newmont fell 5.7% after the CFO's surprise resignation and news it had offloaded stakes in Greatland Resources and Discovery Silver for $470 million, while South32 slipped 3% after UBS cut its price target from $3.20 to $3.

• Healthcare sector (-0.38%) was impacted after Trump signalled potential tariffs on pharmaceuticals by month-end, with CSL down 1.3%.

• Rare earth miners were a rare bright spot following a $US500 million ($765.4 million) deal between US player MP Materials and Apple to bolster production of iPhones in the world's largest economy. Iluka rose 4.3%, Lynas gained modestly.

Economy

• Overnight, US consumer prices increased by the most in five months in June, up 0.3% on the month and 2.7% from a year ago, with evidence emerging that Trump's tariff policies are beginning to flow through to consumer prices.

• Indonesia said it had reached a trade deal with the United States after an "extraordinary struggle" in negotiations, which resulted in a reduction of proposed US tariff rates on the country's exports to 19% from 32 %, marking one of the first completed negotiations ahead of the August 1 deadline.

• At least nine US and international banks raised their forecasts for China's economic growth this year following better-than-expected data from the second quarter yesterday, although they expect the momentum to fade in the coming months, with banks including Morgan Stanley and Goldman Sachs upgrading estimates closer to 5%.

• Building commencements are behind the 1.2 million home target, with 47,645 dwellings commenced in the March quarter, representing an uptick but still tracking well behind the government's housing construction goals, according to latest ABS data

Interesting Movers

Trading higher

• +14.29% Meteoric Resources (MEI) – Rare earths enthusiasm

• +12.34% MTM Critical Metals (MTM) – Rare earths enthusiasm

• +10.59% Brazilian Rare EARTHS (BRE) – Rare earths enthusiasm

• +10.00% Mount Gibson Iron (MGX) – Agreement to acquire 50% of the Central Tanami Gold Proj

• +8.75% Amaero (3DA) – Rare earths enthusiasm

• +8.06% NUIX (NXL) – No news

• +7.55% WIA Gold (WIA) – Kokoseb mineral resource estimate increases to 2.93Moz gold

• +7.26% Tyro Payments(TYR) – Bouncing back from selloff

Trading lower

• -7.65% Pacific Smiles Group (PSQ) – No news

• -6.70% Summerset Group Holdings (SNZ) – No news, thin trade

• -6.67% Silver Mines (SVL) – No news

• -5.73% Newmont Corporation (NEM) – CFO resigns, asset sale

• -4.6% Elsight (ELS) – Pause in the strong rally

Broker Notes

Amplitude Energy (AEL)

• Retained at Buy at Morgans; Price Target: $0.30 from $0.28

ANZ Group Holdings (ANZ)

• Retained at Neutral at Citi; Price Target: $27.50

• Retained at Neutral at Macquarie; Price Target: $27.50

Bendigo and Adelaide Bank (BEN)

• Retained at Underperform at Macquarie; Price Target: $10.25

BHP Group (BHP)

• Retained at Accumulate at Morgans; Price Target: $43.90 from $43.70

Beach Energy (BPT)

• Retained at Hold at Morgans; Price Target: $1.35 from $1.36

Commonwealth Bank of Australia (CBA)

• Retained at Sell at Citi; Price Target: $100.00

• Retained at Underperform at Macquarie; Price Target: $105.00

Charter Hall Group (CHC)

• Retained at Overweight at Morgan Stanley; Price Target: $22.60

Cochlear (COH)

• Downgraded to Neutral from Outperform at Macquarie; Price Target: $270.50 from $699.00

Evolution Mining (EVN)

• Retained at Neutral at Citi; Price Target: $7.70 from $8.00

EVT (EVT)

• Retained at Buy at Ord Minnett; Price Target: $17.89 from $16.17

Fortescue (FMG)

• Retained at Hold at Morgans; Price Target: $16.50

HUB24 (HUB)

• Retained at Buy at Bell Potter; Price Target: $115.00 from $100.00

• Downgraded to Underperform from Hold at Jefferies; Price Target: $84.00 from $80.00

• Retained at Neutral at Macquarie; Price Target: $95.90 from $74.20

• Retained at Overweight at Morgan Stanley; Price Target: $80.00

• Retained at Sector perform at RBC Capital Markets; Price Target: $85.00 from $75.00

• Retained at Buy at Unified Capital Partners; Price Target: $125.00 from $89.70

Judo Capital Holdings (JDO)

• Retained at Outperform at Macquarie; Price Target: $1.80 from $1.75

Karoon Energy (KAR)

• Retained at Buy at Morgans; Price Target: $2.26 from $2.25

Liberty Financial Group (LFG)

• Retained at Outperform at Macquarie; Price Target: $4.30 from $4.40

National Australia Bank (NAB)

• Retained at Sell at Citi; Price Target: $30.50

• Retained at Neutral at Macquarie; Price Target: $35.00

Netwealth Group (NWL)

• Retained at Neutral at Macquarie; Price Target: $33.35 from $28.40

NEXTDC (NXT)

• Retained at Buy at Citi; Price Target: $18.35 from $18.70

Ora Banda Mining (OBM)

• Retained at Outperform at Macquarie; Price Target: $0.90 from $1.05

Oohmedia (OML)

• Retained at Buy at Canaccord Genuity; Price Target: $2.00

• Retained at Neutral at Goldman Sachs; Price Target: $1.60 from $1.50

• Retained at Hold at Jefferies; Price Target: $1.80

• Retained at Overweight at JPMorgan; Price Target: $1.75 from $1.60

• Retained at Outperform at Macquarie; Price Target: $2.00

Orora (ORA)

• Retained at Outperform at Macquarie; Price Target: $2.36 from $2.39

• Retained at Hold at Ord Minnett; Price Target: $2.30

Pepper Money (PPM)

• Downgraded to Neutral from Outperform at Macquarie; Price Target: $1.70 from $1.65

Rio Tinto (RIO)

• Retained at Neutral at Citi; Price Target: $113.00 from $108.00

• Retained at Equal weight at Morgan Stanley; Price Target: $119.50

• Downgraded to Hold from Accumulate at Morgans; Price Target: $109.00 from $119.00

• Retained at Buy at Ord Minnett; Price Target: $120.00

• Retained at Neutral at UBS; Price Target: $115.00 from $120.00

Resimac Group (RMC)

• Retained at Neutral at Macquarie; Price Target: $0.95 from $1.00

ResMed Inc. (RMD)

• Upgraded to Outperform from Sector perform at RBC Capital Markets; Price Target: $294.00 from $255.00

Regal Partners (RPL)

• Retained at Buy at Morgans; Price Target: $3.30 from $4.50

South32 (S32)

• Retained at Buy at Morgans; Price Target: $4.10 from $4.30

Santos (STO)

• Retained at Trim at Morgans; Price Target: $6.80 from $6.90

Technology One (TNE)

• Downgraded to Sell from Hold at Bell Potter; Price Target: $35.75 from $35.50

Tyro Payments (TYR)

• Retained at Buy at Canaccord Genuity; Price Target: $1.65

• Retained at Buy at Jefferies; Price Target: $1.40

• Retained at Buy at UBS; Price Target: $1.35

• Retained at Overweight at Wilsons; Price Target: $1.15

Westpac Banking Corporation (WBC)

• Retained at Sell at Citi; Price Target: $27.75

• Retained at Underperform at Macquarie; Price Target: $27.50

Woodside Energy Group (WDS)

• Retained at Buy at Morgans; Price Target: $31.00 from $30.10

Zip Co (ZIP)

• Retained at Buy at Citi; Price Target: $3.10

Scans