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Following a volatile trading session overnight, US equities closed higher, as investors bet that the Federal Reserve may be nearing the end of its rate hiking cycle. The Dow and the S&P500 rose 0.2% and 0.3% respectively, while the Nasdaq closed just over 1% higher, as tech stocks outperformed.

European markets were lower as the Bank of England joined the Fed in hiking rates. The UK central bank announced another 25-basis point rise and the Stoxx 600 closed down 0.2%. The banking sector led losses throughout the session. Construction and oil and gas stocks also declined, while tech stocks rallied in Europe as well.

What to watch today:

• The broad tech rally made way to renewed selling in regional banking stocks, which sees the SPI futures suggesting the Australian market will drop 0.55% at the open this morning.
• Technology stocks may follow the Nasdaq’s rally, with investors reducing their bets on the Fed’s next hike, and as US Treasury yields decline. Tech stocks are sensitive to interest rates, so this saw tech hit the hardest as the Fed consecutively raised rates. Therefore, the turn lower in rates this month is causing investors to rotate back into tech stocks. And this may have a positive impact on ASX-listed tech shares today.
• In commodities:
  • Oil has dropped once again, weighed down by weak global sentiment.
  • The price of gold is trading over 1.2% higher and has reached its highest level in one year, at US$1,993.90 per ounce, as investors continued to digest the Fed’s March meeting and risks to the global banking system.
  • Iron ore has tumbled, currently trading 2.8% lower at US$123.50 per tonne, the lowest level in over a month. The iron ore price has been pressured by weaker demand from steel producers and increased control of speculatory prices. There have also been reports indicating that China will cut its domestic steel output by 2.5% this year. That would mark the third consecutive annual decline and of course China is one of the top producers.

Trading Ideas:

• Bell Potter have upgraded their recommendation on Eagers Automotive (ASX:APE) from a Hold to a Buy, with a price target of $15.25, where the total expected return is over 15%. A potential catalyst to support the upgrade on the leading automotive retailer, are increased sales of BYD vehicles over the coming months, following the joint venture of Eagers Automotive and BYD, which is an electric car dealership. 
• And Trading Central have identified a bullish signal on PWR Holdings (ASX:PWH) indicating that the stock price by rise from the close of $9.65 to the range of $12.20 to $12.70 over 27 days, according to the standard principles of technical analysis.