Australian shares set to track gains on Wall Street
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The news: The Australian sharemarket is set to extend gains after stocks rallied on Wall Street, a day after the US Federal Reserve cut interest rates for the first time in more than four years.
The numbers: The Dow Jones index ended 1.26% higher, while the broader S&P 500 climbed 1.70% and the tech-heavy Nasdaq rose 2.51%. In the local market, ASX 200 futures were up 31 points or 0.38% at 8,281 points at 7am AEST on Friday.
The context: Both the Dow Jones and the S&P 500 registered record closing highs, led by fresh gains in heavyweight stocks including Tesla, Apple, Meta Platforms and Nvidia, which have enjoyed much of this year's stock market rally. Better-than-expected jobless claims data further stoked global risk appetite.
On Wednesday, the Federal Reserve announced a rate cut at the high end of expectations, and said it had greater confidence inflation was under control.
Fed Chair Jerome Powell said the US economy remained strong and the central bank would decide on the appropriate pace of future rate cuts. BofA Global Research said it now expects a total of 75 basis points in rate cuts by the end of this year, steeper than its previous forecast of 50 bps.
What they said: "The Fed has sanctioned a pretty strong economic picture here, and so we're just seeing the money flow back into some of the sectors that have perhaps underperformed so far this quarter," James Ragan, director of wealth management research at DA Davidson told Reuters.
The source: Reuters
