Australian shares to edge higher as chip rally boosts Wall Street
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The news: The Australian sharemarket is set to open marginally higher after Wall Street gained overnight, as a rally in chip stocks lifted the broader market on optimism that AI-driven demand will support a strong second-quarter earnings season.
The numbers: Updated at 7:40am AEST:
- ASX futures: up 3 points to 8,813 points
- Wall Street: Dow Jones up 0.29%, S&P 500 up 0.72%, Nasdaq up 1.12%
- Europe: FTSE 100 down 0.26%, CAC 40 down 0.33%, DAX up 0.15%
- Spot gold: down 0.13% to USD4,164 per ounce
- Oil prices: Brent down 0.42% to USD71.80/barrel, US WTI down 0.11% to USD68.69/bbl
- AUD: up 0.21% at 69.53 US cents
- Bitcoin: up 0.96% to USD64,166.
The context: The Nasdaq led US markets higher on Monday, rising 1.2% as investors shrugged off recent concerns about AI-related valuations. The Dow gained 0.3% to record its 21st record close of the year, while the S&P 500 information technology sector index rose 1.3%. The Philadelphia Semiconductor Index advanced 2.2%, snapping a two-session losing streak.
Broadcom climbed 3.7% after extending its agreement with Apple through to 2031 to develop and supply custom chips. Meanwhile, South Korea’s SK Hynix is set to debut on the Nasdaq later this week. Microsoft fell almost 1% after announcing plans to cut about 2.1% of its workforce, or roughly 4,800 jobs.
With the US earnings season set to begin in the coming days, expectations remain high. LSEG data shows analysts expect S&P 500 companies to deliver aggregate year-on-year earnings growth of 24% in the second quarter, with tech sector earnings forecast to surge around 65%.
Elsewhere, oil prices settled at its lowest level since late February after Saudi Arabia announced its largest cut to crude prices in at least 26 years, adding to signs of oversupply in the global markets.
Locally, the Reserve Bank of Australia will release retail payments data at 11:30am AEST, followed by official reserve assets at 4:30pm AEST.
