By Giuseppe Tauriello 14 October 2025
Investors can expect the rocky ride on the Australian sharemarket to continue following Monday’s sell-off, but the bull run is likely to extend well into next year despite escalations in the trade war between the world’s two largest economies.
The ASX 200 fell 0.8 per cent to 6582.8 points, wiping more than $20bn from the local market, after US President Donald Trump threatened to slap an additional 10 per cent tariff on Chinese imports in response to Beijing’s tightening of its rare-earth mineral exports.
However, the retreat is being viewed as just a blip for the Australian sharemarket, which has soared by 22 per cent since Mr Trump’s “Liberation Day” tariffs announcement in April.
Chester Asset Management portfolio manager Anthony Kavanagh said that while “pockets of exuberance” had driven share prices higher, there were still many indicators that suggested the rally was likely to continue.
“Something like today is almost the mini correction that we needed to have, but I don’t think it will necessarily be extended,” he said.
“I think we could be in a period of a strong market for a period of time. But you will get these types of corrections… volatility has to increase with the level of political uncertainty that continues to be there, both in Australia and the US.”
One of the main factors behind the rise of the sharemarket has been the optimism around interest rate cuts, which has pushed the local market to record highs. Investors will learn more about the Reserve Bank’s thinking on interest rates today when it releases the minutes of its September meeting.
Hayborough Investment Partners portfolio manager George Capozzi said lower interest rates were stimulating the economy and, in turn, confidence in the sharemarket.
“I think the one thing that’s driving the market at the moment is the fact that everyone has factored in that interest rates are going to be coming down still,” he said. “That drives asset prices, whether it’s property or shares.”
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