Australian shares set to extend losses after Wall Street fall
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The news: The Australian sharemarket is set for a sharp drop following a sell-off on Wall Street after fresh data brought back investor focus on inflation.
The numbers: The Dow Jones index ended 1.53% lower, the broader S&P 500 lost 0.74% while the tech-heavy Nasdaq dropped 0.39%. In the local market, ASX 200 futures were down 83 points or 1.06% at 7,759 points at 7:00am AEST on Friday.
The context: US stocks ended lower despite a surge in Nvidia shares, which was overshadowed by economic data showing inflation was still a concern that could delay any Federal Reserve rate cuts.
Data showed US price pressures increased in May even as business activity accelerated and as lower weekly jobless claims indicated the labour market remains on firm footing. That prompted treasury yields to move higher, which weighed heavily on small cap stocks.
Markets are now pricing in a 52.2% chance for a rate cut of at least 25 basis points in September, down from the nearly 67% a week ago, according to CME's FedWatch Tool.
The source: Reuters
