Australian shares set to track losses on Wall Street

The news: The Australian sharemarket is set to track losses on Wall Street after the US Federal Reserve held interest rates steady and dashed hopes for early rate cuts.

The numbers: The Dow Jones index is trading just 0.06% higher, while the broader S&P 500 was down 0.64% and the tech-heavy Nasdaq lost 1.10%. In the local market, ASX 200 futures were trading 73 points or 0.93% lower at 7572 points at 7:00am AEDT on Thursday, a day after hitting a new 52-week high.

The context: All three major US stock indexes turned lower after the Federal Reserve reiterated that despite progress, inflation risks remain, and that no rate cuts were imminent. Stocks were already weighed down by weakness in tech and tech-adjacent megacap stocks a day after disappointing Alphabet and Microsoft results. A spate of economic indicators released overnight suggested some easing in the labour market, but the Fed’s statements dealt a blow to market participants hoping for a dovish pivot as early as March.

What they said: Oliver Pursche, senior vice president at Wealthspire Advisors, told Reuters: "It does appear that further rate hikes are off the table, which is a positive, but investors should continue to expect higher for longer as we're still quite a ways away from the sort of economic data that would push the Fed to lower rates."