Australian shares set to track decline on Wall Street

The news: The Australian sharemarket is poised for a weak start, tracking small declines on Wall Street where nervous investors await key inflation data that could determine the timing of rate cuts by the Federal Reserve.

The numbers: The Dow Jones index was down 0.26%, the broader S&P 500 lost 0.17% while the tech-heavy Nasdaq fell 0.47%. In the local market, ASX 200 futures were down 22 points or 0.27% at 7,607 points at 7:00am AEDT on Thursday.

The context: US stocks fell a day ahead of a key reading of the personal consumption expenditures (PCE) price index, the Fed's preferred inflation gauge, that could heavily shape expectations for the timing of an interest rate cut.

Data overnight confirmed the US economy grew at a solid 3.2% in the fourth quarter on strong consumer spending. Evidence of stubborn inflation in recent data on consumer and producer prices, a resilient US economy, and commentary from some Fed officials have caused the market to dial back expectations for the Fed's first cut to June from March.