It's looking like ASX shares will end the trading week on a bit of a sour note this Friday. At the time of writing, the S&P/ASX 200 Index (ASX: XJO) has fallen by a hefty 0.71%, leaving the index at just under 8,300 points.
Of course, this retreat for ASX shares comes after what had otherwise been a very happy week for Australian investors. This week, the ASX 200 printed multiple new all-time record highs.
The first came on Tuesday when the index hit a new record of 8,331.7 points. But investors reset that record again on Thursday. Yesterday's session saw the ASX 200 climb to 8,384.5 points.
Given today's performance thus far, it seems that's where the share market's record is likely to stand, at least until next week.
Objectively, ASX investors don't really have much to complain about. The ASX 200 is still sitting very close to its new all-time highs. Plus, the index remains up a healthy 8.86% in 2024 to date.
But even so, many investors might be asking themselves why the markets are pulling away from yesterday's record highs this Friday. Let's get into why this might be happening.
Why is the ASX 200 abandoning its new record highs this Friday?
Well, there are a couple of things that could be influencing today's market drop.
The first is the performance of the major ASX mining shares today. Miners make up a huge chunk of the ASX 200 Index. Of course, BHP Group Ltd (ASX: BHP) is the ASX 200's second-largest single stock, commanding an approximate 8.93% weighting in the entire index.
Rio Tinto Ltd (ASX: RIO) and Fortescue Ltd (ASX: FMG) contribute roughly another 3.17%. So these miners can well and truly move the markets.
Today has incidentally seen all three of these big ASX 200 miners take a nasty haircut. BHP shares are currently down 1.6% to $42.20. Rio has tumbled 0.72% to $117.77, while Fortescue has shed 2.24% to $19.46.
It seems a notable drop in iron ore prices over the back half of this week is to blame here.
Another factor at play could be interest rate expectations.
Yesterday, my Fool colleague Bernd covered the latest unemployment figures out of the Australian economy.
These figures were good news for job seekers, with the unemployment rate holding steady at 4.1%. However, as we pointed out yesterday, this has also dampened hopes of an RBA interest rate cut this year.
Many investors were hoping that our RBA would follow the lead of other central banks around the world in 2024 and begin to lower interest rates. However, with inflation still sticky and the economy robust, yesterday's figures arguably lower the chances of this happening.
Lower rates are usually good news for the share market. So these lowered expectations could also be pulling down the ASX 200 this Friday.
Let's see how the index lands the plane for the week later this afternoon.
