Australian shares to open higher after Wall St rebounds from Friday selloff
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The news: The Australian sharemarket is set to open higher after US stocks advanced overnight, driven by gains in the Nasdaq and chipmakers as investors bought into Friday’s sharp selloff, while a halt in attacks between Iran and Israel also lifted market sentiment.
The numbers: Updated at 7:50am AEST:
- ASX futures: up 25 points to 8,535 points
- Wall Street: Dow Jones down 0.16%, S&P 500 up 0.30%, Nasdaq up 0.86%
- Europe: FTSE 100 up 0.05%, CAC 40 down 0.23%, DAX down 0.58%
- Spot gold: down 0.03% to USD4,329.82 per ounce
- Oil prices: Brent down 0.35% to USD92.76/barrel, US WTI up 0.79% to USD91.25/bbl
- AUD: up 0.04% at 70.45 US cents
- Bitcoin: up 0.80% to USD63,741
The context: The Nasdaq composite pared early gains on Monday to close 0.9% higher, while the S&P 500 rose 0.3%. The Dow slipped 0.2%. Chipmakers led gains, with Nvidia and Micron Technology climbing 3.5% and 9.9% respectively following last week’s sharp selloff.
Technology was the strongest performing sector in the S&P 500, rising 1.5%, while the Philadelphia SE Semiconductor Index jumped 5.6%, recovering some of Friday’s losses that wiped about USD1 trillion from the market value of US-listed chipmakers, according to Bloomberg.
The rebound marked a reversal from Friday, when a stronger-than-expected US jobs report and a pullback in AI-related stocks sent the Nasdaq down more than 4%. Futures initially pointed lower on Sunday following a renewed fighting between Iran and Israel over the weekend.
Sentiment subsequently improved after Iran said it had concluded its latest strikes against Israel. Both countries later announced a halt in military action, while warning that hostilities could resume, after the most serious exchange of fire since the April ceasefire threatened to collapse US-led peace negotiations with Tehran.
However, Tehran warned it would resume attacks if Israel continued operations against Hezbollah in Lebanon, while Netanyahu said Israel would retaliate if attacked again, according to Reuters. Oil prices and Treasury yields both pared earlier gains as tensions eased.
On the economic front, attention has shifted back to inflation following Friday’s payroll report. Bloomberg reported that the May consumer price index, due on Wednesday (ET), is expected to rise 4.2% from a year earlier, the fastest pace in more than three years. Core inflation is forecast to ease slightly on a monthly basis, potentially offering some relief for Fed officials.
Locally, the Australian Bureau of Statistics will release March quarter residential property statistics, including total value, transaction volumes and average prices at 11:30am AEST.
