Australian shares set to drop after Wall Street decline
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The news: The Australian sharemarket is set to open lower after a decline on Wall Street on worries over the Middle East conflict and ahead of Friday's monthly US payrolls report.
The numbers: The Dow Jones index ended 0.44% lower, while the broader S&P 500 lost 0.17% and the tech-heavy Nasdaq eased 0.04%. In the local market, ASX 200 futures were down 27 points or 0.33% at 8,215 points at 7am AEST on Friday.
The context: The major indices slipped after data showed the number of Americans filing new applications for unemployment benefits rose marginally last week, while Hurricane Helene and strikes at ports could distort the labour market picture in the near term.
Friday’s jobs report for September is considered key for the outlook for US interest rates, with economists polled by Reuters expecting 140,000 job additions, while the unemployment rate is anticipated to stay steady at 4.2%.
Investors are eager for more data on the labour market after the Federal Reserve last month cut its benchmark interest rate by an unusually large 50 basis points, the first reduction in borrowing costs since 2020.
Traders are now pricing in a 35% probability of a 50 basis point cut next month, down from 49% a week ago, the CME Group's FedWatch Tool shows.
The source: Reuters
