Australian shares set to start higher after Wall Street gains

The news: The Australian sharemarket is set to start higher, taking cues from gains on Wall Street on Friday where stocks closed higher on investor optimism about a soft landing for the US economy.

The numbers: The Dow Jones index closed 0.36% higher, the broader S&P 500 added 0.21% to hit its highest since March 2022, while the tech-heavy Nasdaq gained 0.45%. In the local market, ASX 200 futures were trading 16 points or 0.22% higher at 7225 points at 7:00am AEDT on Monday.

The context: The latest gains were boosted by a robust US jobs report which showed higher than estimated increase in nonfarm payrolls in November, prompting hopes for a soft landing for the economy. Robust quarterly reports and optimism that the Fed has finished raising rates have fuelled steady gains in the US stock market since late October. Interest rate futures show traders widely expect the Federal Reserve to hold interest rates steady at its meeting next week, but are also betting the Fed will start cutting rates in May.