Australian shares set to track gains on Wall Street
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The news: The Australian sharemarket is set to open higher, tracking overnight gains on Wall Street after reassuring comments from the Federal Reserve chair despite higher-than-expected data.
The numbers: The Dow Jones index ended 0.32% higher, while the broader S&P 500 gained 0.48% and the tech-heavy Nasdaq added 0.75%. In the local market, ASX 200 futures were up 36 points or 0.46% at 7,799 points at 7:00am AEST on Wednesday.
The context: US stocks advanced even as US producer prices increased more than expected in April as the cost of services and goods rose sharply, leading traders to pare back bets of a first rate cut in September. But Fed chair Jerome Powell later described the report as more mixed than hot given that prior-period data was revised lower.
Investors were also encouraged by Powell's comment that he did not expect the US central bank's next interest rate move to be a hike, despite a recent run of higher-than-expected inflation. Investors are awaiting Wednesday's US Consumer Price Index figures to assess whether upside surprises in the first quarter extended into April.
What they said: "The market is getting more comfortable with higher-for-longer rates. The real question has been lately if a hike is a possibility and Powell's reiterating that it's not on the table right now," Lindsey Bell, chief strategist at 248 ventures in Charlotte, North Carolina told Reuters.
The source: Reuters
