Australian shares to open higher after US stocks extend winning streak

The news: The Australian sharemarket is set to open higher after another session of gains on Wall Street as the latest US inflation data reassured investors the Federal Reserve would start cutting interest rates next month.

The numbers: The Dow Jones index ended 0.61% higher, the broader S&P 500 gained 0.38% while the tech-heavy Nasdaq edged up 0.03%. In the local market, ASX 200 futures were up 28 points or 0.36% to 7,832 points at 7am AEST on Thursday.

The context: US stocks rose after the latest consumer price data reinforced expectations the Fed would start interest rate cuts in September, although moves were generally subdued with many investors away for August vacations. US consumer prices rose moderately in July, and the annual increase in inflation slowed to below 3% for the first time since early 2021.

A day earlier, softer-than-expected producer prices data also indicated inflation continued to moderate. Money markets now see a 55% chance of a 25-basis point (bps) rate cut at the Fed's 17-18 September meeting, as per the CME FedWatch Tool. Thursday's release of retail sales data will be keenly watched by those concerned about the overall strength of the American economy.