Australian shares set to drop after tepid Wall Street close

The news: The Australian sharemarket is set to drop in early trading following a mixed close last week for the major US indices as investor enthusiasm over the likely path of interest rates waned.

The numbers: The Dow Jones index ended 0.15% higher on Friday, while the broader S&P 500 slipped 0.36%, and the tech-heavy Nasdaq added 0.36%. In the local market, ASX 200 futures were trading 74 points or 0.99% lower at 7381 points at 7:00am AEDT on Monday.

The context: Stocks wobbled on Wall Street after euphoria over the Federal Reserve's dovish pivot was dampened by New York Federal Reserve President John Williams pushing back against expectations for early rate cuts. He reiterated that the US central bank remains focused on bringing inflation down to its 2% target. In the local market, investor focus will be on the minutes from the RBA’s December meeting, which are likely to show the board had considered another hike.