Australian shares set to start higher after tech rally on Wall Street

The news: The Australian sharemarket is poised to start higher, tracking solid gains for major US indices overnight where treasury yields tumbled ahead of inflation readings later this week.

The numbers: The Dow Jones index is up a modest 0.2%, but the broader S&P 500 gained 0.95% while the tech-heavy Nasdaq jumped 1.78% as megacap tech shares rallied after the benchmark 10-year US Treasury yield slid below 4%. In the local market, ASX 200 futures were trading 74 points or 1% higher at 7506 points at 7:00am AEDT on Tuesday.

The context: While the Dow was held back by a sharp drop in Boeing shares, the Nasdaq benefited from a lift for tech stocks including chipmakers Nvidia and AMD, Apple and Amazon following the drop in bond yields, as investors reinforced expectations of a soft landing for the US economy. Money markets now see a 69.5% chance of at least a 25-basis-point rate cut by the Fed as soon as March. In the local market, traders will keep an eye out for November retail sales and building approvals, ahead of the inflation report for that month on Wednesday.