Meanwhile, miners (up 0.1 per cent) were among the weakest companies on the index with iron ore heavyweight Fortescue losing 5.2 per cent and winding up as the day’s poorest performer after an institutional investor pressed sell on a $1.1 billion stake in the company after Monday’s closing bell. Lynas Rare Earths (down 1.3 per cent) and Northern Star Resources (down 1.1 per cent) were also weaker.

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Bellevue Gold dipped 4.8 per cent, and Data#3 slid 2.8 per cent.

The lowdown

Deloitte Access Economics partner Stephen Smith said the RBA’s decision to hold the cash rate was the right call and a reminder that the economy is on a “knife’s edge”.

“Rebuilding the productive capacity of the economy and its run rate should be the main game in town. An overexaggerated emphasis on demand management in a weak economy and with inflation trending down will only result in an unnecessary and painful recession,” Smith wrote in a note.

“Nobody likes the fact that inflation remains just outside of the RBA’s target band. But it is better than a recession. The only way to get the economy moving while continuing to bring inflation is to increase productivity in the economy. This can only be achieved through policy and reform, not interest rate hikes.”

Deloitte expects the Reserve Bank to cut rates in November.

AMP chief economist Shane Oliver said Reserve Bank Governor Michele Bullock’s language during her press conference was “a bit more hawkish than in May, suggesting more risk of a hike than a cut in the near term”.

“We continue to see rates as having peaked, with rate cuts starting late this year. However, the risk of another hike is high if inflation surprises on the upside again this quarter,” said Oliver.

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Overnight, US stocks rose to records as gains for technology companies kept pushing the market higher.

The S&P 500 climbed 0.8 per cent to top its all-time high set on Thursday. The Dow Jones gained 0.5 per cent, while the Nasdaq composite added 1 per cent to its own record.

Continued momentum for Big Tech stocks, along with easing pressure on inflation, has investors “cheering the ‘glass half full’ outlook” instead of focusing on the struggles of lower- and middle-income Americans and other challenges, according to Anthony Saglimbene, chief market strategist at Ameriprise.

The gains for tech helped offset pressure on the stock market caused by rising Treasury yields in the bond market. The climb in yields erased some of the slack created last week when better-than-expected reports on inflation raised hopes that the Federal Reserve will cut interest rates later this year.

This upcoming week has few top-tier economic reports for the United States, outside of Tuesday’s update on how much customers are spending at US retailers and Friday’s preliminary look at the state of US business activity. Markets will also be closed on Wednesday for the Juneteenth holiday.

In the bond market, the yield on the 10-year Treasury climbed to 4.28 per cent from 4.22 per cent late Friday. The two-year Treasury yield, which more closely tracks expectations for the Fed, rose to 4.76 per cent from 4.71 per cent.

Tweet of the day

Quote of the day

“We need a lot to go our way if we’re going to bring inflation back down to the 2 per cent target range. The board does need to be confident that inflation is moving sustainably towards target, and it will do what is necessary to achieve that outcome.”

That’s RBA Governor Michele Bullock speaking at a press conference this afternoon after the board meeting that kept the cash rate steady, saying the economic path is getting narrower for the nation as risks to the economy and inflation grow.

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The RBA is laser-focused on getting inflation down. It has been working, and that’s good news, but it hasn’t been without other costs.

The jobs market has stayed stronger than most people predicted, with the unemployment rate drifting between 3.5 per cent (a record low) and 4.1 per cent in January and April this year. Most recently, in May, it dropped back down to 4 per cent. Our banking reporter, Millie Muroi, opines on why we’ll all be able to hang onto our jobs if Bullock nails hers.