ASX 200 ends the week flat at 8,731.2 as the Fed hikes and the local volatility index falls 16.83%

ASX 200 week close: 8,731.2 (-0.11%) S&P 500 Friday close: 7,650.50 (+0.17%) Sentiment: mixed

The S&P/ASX 200 closed at 8,731.2 on 18 September 2026, down 10.0 points or 0.11% for the week, after the index recovered a Tuesday slide to 8,672.5 across the three sessions that followed the Federal Reserve's 25 basis point hike. 4DX.AU rose 28.27% to $4.31 with no announcement, 13.42% of it on Friday alone, as Health Care led every sector at +3.76%. The Australian 10-year yield reached 5.40% on Tuesday, its highest since May 2011, then eased to 5.27% by Friday.

The week on the ASX

Tuesday's 8,672.5 close was the weakest since 12 June. The index rose 0.28% on Wednesday, added 0.41% on Thursday after the Federal Reserve lifted its target range to 3.75% to 4.00% at 04:00 AEST with 16 of 18 officials projecting another increase this year, then fell 1.2 points on Friday. Those three sessions added 58.7 points and still left the week 10.0 points down. The All Ordinaries finished 2.5 points higher at 8,922.7.

The S&P/ASX 200 VIX fell 16.83% to 11.944, the largest weekly decline in the local volatility index since March, and the US VIX lost 6.50% to 14.81. Australian yields fell into Friday: the 3-year to 4.93%, down 11 basis points over the last three sessions, and the 10-year to 5.27%, down 10 basis points. Brent front month ended at US$103.87, 0.71% lower for the week after trading at US$108.75 on Tuesday.

Sector scorecard (5-day)

• Best: Health Care +3.76%, with TLX.AU +13.91% and PYC.AU +16.09%
• Worst: A-REITs -1.80%; LLC.AU -10.32% and GMG.AU -4.79%
• Energy -1.29%: WHC.AU -7.79%, YAL.AU -6.43%, SMR.AU -7.90% on weaker thermal and coking coal pricing
• Information Technology -0.81%: XRO.AU -6.37%, NXT.AU -5.80%, WTC.AU -1.93%
• Materials -0.32% after a Friday rally of 1.60%, still 9.2% below the 25 August record high
• Dispersion (best minus worst): 5.56 points

Top movers, week ending 18 September

The rebalance trade

S&P Dow Jones Indices settled its September quarterly review at the Friday 18 September close, with every change effective prior to the open on Monday 21 September. ELS.AU, SIQ.AU, SRL.AU, SSM.AU and WBT.AU enter the S&P/ASX 200. EVT.AU, GNC.AU, GQG.AU, PNR.AU and TUA.AU leave it. MIN.AU and NXT.AU move into the S&P/ASX 50 in place of COH.AU and WTC.AU, and CDA.AU joins the S&P/ASX 100.

The ASX 300 additions took Friday's biggest single-session moves: SKS.AU +15.02%, TEA.AU +13.70%, BRE.AU +13.65%, PYC.AU +11.25%, BNZ.AU +7.55% and EQR.AU +6.59%. The index gave back an early rally in the process, opening at 8,758.1 and closing 1.2 points lower on the day at 8,731.2. MAH.AU added 12.57% across the week on a separate catalyst, agreeing on 17 September to buy Aspect Engineering Solutions for an enterprise value of $75 million.

Friday US session

• S&P 500: 7,650.50 (+0.17%)
• Nasdaq Composite: 26,522.54 (+0.39%)
• Dow Jones Industrial Average: 51,682.64 (-0.18%)
• VIX: 14.81 (-4.08%)

Friday 18 September was US quadruple witching, the quarterly expiry of index futures, index options, stock options and single stock futures. Over the full week the Nasdaq Composite gained 0.72%, the Dow Jones Industrial Average lost 1.69% and the S&P 500 finished 0.08% lower.

AUD/USD ended the week at 0.7122, down 0.72% from 0.7173, which trims the AUD value of USD revenue for CSL.AU and JHX.AU. December gold settled at US$4,424.9 per ounce, up 0.36% for the week and 0.57% on Friday, and Comex copper gained 2.25% to US$6.615 per pound.

Macro themes that played out

RBA Governor Michele Bullock told the House of Representatives Standing Committee on Economics on 18 September that the Monetary Policy Board must decide whether tightening to date is sufficient to return inflation to target in a reasonable time. She said the cash rate has risen 75 basis points this year, that headline and underlying inflation have run around or a little above 3.5% over the past twelve months, and that the August Statement on Monetary Policy put the return to the 2.5% midpoint in late 2027. Pricing for a hike at the 29 September decision moved to about 90% from about 84% during the testimony, with the cash rate held at 4.35% for two meetings.

Bullock also said Australian businesses have started asking whether inflation is coming back below 3%, and that the longer inflation stays above target the more likely expectations adjust. Unemployment is 4.5%. Every one of the big four banks now forecasts a November hike after Westpac moved to 4.6% on 16 September.

The Bank of Japan raised its benchmark rate to 1.25% on Friday on a 7 to 2 vote, with board members Toichiro Asada and Ayano Sato dissenting, and the yen fell as much as 0.6% to 156.94 per dollar. The offshore yuan reached 6.6967 per dollar, its strongest since July 2022, after the PBOC set a firmer daily fixing for an eighth consecutive session.

Week ahead, Mon to Fri (AEST)

• Mon 21 Sep, at the open: S&P/ASX index changes take effect; ELS.AU, SIQ.AU, SRL.AU, SSM.AU and WBT.AU begin trading as ASX 200 constituents
• Wed 23 Sep, 09:00: S&P Global Flash Australia PMI for September
• Wed 23 Sep, 23:45: S&P Global Flash US PMI for September
• Thu 24 Sep, 11:30: ABS Labour Force for August; the most recent unemployment reading is 4.5%
• Thu 24 Sep, 11:30: ABS Australian National Accounts: Finance and Wealth for the June quarter
• Fri 25 Sep, 00:00: US new home sales for August; July ran at a 607,000 annual rate, 10.5% below June
• Fri 25 Sep, 22:30: US advance durable goods orders for August; July rose 1.1% to US$339.3 billion

No Australian CPI prints this week. The August Consumer Price Index is due on 30 September, the day after the RBA decision on 29 September at 14:30 AEST, and US Q2 GDP plus August personal income and outlays are also due that day.

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