Australian shares set to drop after Wall Street ends sharply lower
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The news: The Australian sharemarket is set to drop in early trading, in line with a sharp decline on Wall Street as jittery investors get nervous about the path of interest rates later this year.
The numbers: The Dow Jones index closed 1.38% lower while the broader S&P 500 lost 1.23% and the tech-heavy Nasdaq fell 1.4%.
In the local market, ASX 200 futures were down 63 points or 0.8% to 7,803 points at 7:00am AEDT on Friday.
The context: US stocks ended sharply lower as Federal Reserve officials took a cautious approach in comments on the outlook for interest rate cuts, while investors braced for Friday's key US monthly jobs report.
Among the comments, Minneapolis Fed Bank President Neel Kashkari said in a virtual event on LinkedIn that he pencilled in two rate cuts this year at the US central bank's meeting last month but added that if inflation continued to stall, none may be required this year.
Economists expect the nonfarm payrolls for March due on Friday to fall to 200,000 from 275,000 in February, while the unemployment rate will likely remain steady at 3.9%, Reuters reported. Money markets still currently expect a near 60% chance of at least a 25 basis-point rate cut in June, according to the CME Group's FedWatch tool.
