Australian shares set to track losses on Wall Street

The news: The Australian sharemarket is set to drop in early trading, tracking overnight losses on Wall Street after the latest US inflation data renewed concerns about interest rates.

The numbers: The Dow Jones index fell 0.51%, while the broader S&P 500 and the tech-heavy Nasdaq both lost 0.63% each after US benchmark 10-year yields rose as high as 4.728% after the inflation data. In the local market, ASX 200 futures were trading 58 points or 0.81% lower at 7067 points at 0700 AEDT on Friday.

The context: The losses on Wall Street came after data showed US consumer prices rose more than anticipated in September, led by surging rent costs. This was followed by a spike in bond yields, which particularly pressured rate-sensitive sectors such as utilities and real estate. Traders now expect a stronger chance the Fed will end up delivering another interest-rate hike this year, and keep rates higher for longer next year.