Rate Cuts to Resource Rallies – What’s next in Markets?

We have a bumper issue of Closing Bell for you today.

There has been a lot going on in markets, so Charlie and I dive in to look at the US interest rate cut, Aussie inflation, uranium, rare earths, lithium, and the falling market breadth in the US.

JP Morgan has upgraded its medium and long-term pricing for lithium on the back of sharply rising demand for Battery Energy Storage Systems (BESS).

With demand rising 50% in 2025 and expected to increase another 46% next year, BESS are starting to become a larger part of overall lithium demand.

As reported in Stockhead.com.au:

‘JPMorgan analysts led by Lyndon Fagan have now upgraded the bank’s 2026/27 forecasts from US$800/t to US$1100/US$1200/t and their long-term price from US$1100/t to US$1300/t.’

Closing Bell viewers were given a heads-up on the opportunity in lithium in July, with Pilbara Minerals [ASX:PLS], Liontown Resources [ASX:LTR], and Mineral Resources [ASX:MIN] suggested options.

All three stocks have rallied strongly since then and appear poised for further upside.

Uranium has also had a big week with Trump’s announcement of a US$80bn investment into buying Westinghouse nuclear reactors.

The uranium price is neatly poised to confirm that it has started a primary uptrend again in the five-year bull market.

This news could be the catalyst to get the rally moving.

The Trump-Xi meeting has been stage-managed into a successful outcome, and rare earths will continue to flow to the US for now.

However, China and the US’s thawing relationship hasn’t caused the rare earth stocks to plummet.

The fact remains that the US needs to build a supply chain for rare earths externally from China. Now that China has used them as leverage over the US, the path forward is set regardless of the outcome of this meeting.

Stocks in general remain near their all-time highs, but when you look under the hood, it becomes clear that market breadth is falling rapidly.

I show you a market breadth indicator and its success over the past few decades in predicting a coming correction.

At the moment, the indicator is flashing orange. It hasn’t tipped over yet, but it doesn’t look great.

So, there’s plenty to discuss today. If you don’t have time up your sleeves, just press on the little cog in the bottom right of the screen and adjust the playback speed so we sound like chipmunks.

Then you will get through the video in a jiffy.

Enjoy today’s instalment of Closing Bell and don’t forget to leave a comment and give us a ‘like’ on the YouTube channel.