Market Wrap / risk retreat

Investors felt the impact of a warning from Fed Chair Jerome Powell that further rate cuts are not a guarantee. The S&P/ASX 200 Index fell 0.92% to 8,764.5 points this Wednesday. Adding to the downbeat sentiment was a surprise lift in inflation locally, with the headline number rising 3% in the 12 months to August. Deustche Bank now expects any rate cuts to be delayed until 2026, saying inflation has proved stickier than it thought. Banking and tech stocks lead losses today. Westpac dropped by 3.2%.In the retail sector, KMD Brands rose 6.5% as sales to August increased 10.5% on FY25 and despite booking a full-year statutory loss, resulting in no dividend payments. Myer extended Tuesday’s loss following a broker downgrade, shares falling 2.1%.Solid gains among lithium miners helped out some of the miners. Liontown Resources advanced by 1.7% ahead of its full-year results. Elsewhere, James Hardie fell 4.8% amid a cautious note on its outlook from Citi.US new home sales data is released tonight, while Cintas and KB Home both issue earnings.