Why's the ASX 200 falling today despite another tech rally?

The ASX 200 is having a choppy session.

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It has been a mixed Tuesday session for the S&P/ASX 200 Index (ASX: XJO), with strength in tech shares not enough to keep the broader market in positive territory.

At the time of writing, the ASX 200 is down 0.49% to 8,686 points.

The index has moved between early weakness and selective buying, showing that the market is still struggling for direction.

The result is a choppy session where a few strong pockets are being offset by wider weakness across the market.

Let's take a closer look at what is moving the ASX 200 today.

A young man talks tech on his phone while looking at a laptop with a financial graph superimposed across the image.

Image source: Getty Images

Retail stocks feel the wage pressure

Retail stocks are under pressure today after the Fair Work Commission handed down its latest wage decision.

Minimum award wages will increase by 4.75% from 1 July, while the national minimum wage will rise to $26.44 an hour, or $1,004.90 a week.

The decision affects around 2.8 million workers, so it is good news for Australians dealing with higher living costs.

The share market, however, is focused on what the wage rise means for company costs.

Retailers are already dealing with cautious shoppers and rising costs, so today's wage decision adds another cost for investors to factor in.

Businesses with large store networks and distribution teams are the ones most exposed, because even small cost increases can become significant across the group.

That concern appears to be weighing on several consumer stocks today.

Woolworths Group Ltd (ASX: WOW) shares are down 1.6% to $34.50, while Coles Group Ltd (ASX: COL) shares have slipped 0.7% to $21.55.

Wesfarmers Ltd (ASX: WES) is also weaker, with its shares down 1% to $78.89. JB Hi-Fi Ltd (ASX: JBH) has fallen 4% to $72.09, while Harvey Norman Holdings Ltd (ASX: HVN) is also down 1% to $4.54.

Economic data adds another concern

There is also some caution around the broader economy after the latest trade numbers.

ABS data showed Australia recorded a seasonally adjusted goods trade deficit of $1.84 billion in March.

It was the first monthly goods trade deficit since December 2017.

Imports jumped 14.1%, helped by a surge in data processing equipment, while exports fell 2.7%.

The Australian reported that Australia's broader net trade position is expected to weigh on March quarter GDP, with imports of data centre equipment playing a major role.

At the same time, today's wage decision has kept inflation and interest rates in focus.

Reuters reported some economists expect the wage rise could add inflation pressure, giving the RBA another issue to weigh closely.

Tech keeps the market from looking worse

Tech shares are helping limit the damage today, even though the broader ASX 200 is still trading lower.

Xero Ltd (ASX: XRO) shares are up 6.25% to $86.01, while WiseTech Global Ltd (ASX: WTC) shares are 5.98% higher at $41.49.

Those gains are helping offset some of the weakness elsewhere across the market.

The buying follows another strong session for AI-linked stocks in the US, where Nvidia shares rose after unveiling its latest AI-focused products.

That has flowed through to parts of the local tech sector, even though the wider market is still struggling.

The S&P/ASX 200 Resources Index (ASX: XJR) is also lending some support, with the sector up 0.58%.

Northern Star Resources Ltd (ASX: NST) is one of the standout moves, with its shares up 13.37% to $20.99.

The gold miner is rallying after reports that Elliott Investment Management has built a stake and is pushing for change.

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Wesfarmers, WiseTech Global, and Xero. The Motley Fool Australia has positions in and has recommended Harvey Norman, WiseTech Global, Woolworths Group, and Xero. The Motley Fool Australia has recommended Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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