Australian shares to open higher as Wall Street eyes earnings season
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The news: The Australian sharemarket is set to open higher as Wall Street edged lower overnight, as investors looked ahead to key earnings reports to assess whether the artificial intelligence-driven market rally can be sustained.
The numbers: Updated at 7:55am AEST:
- ASX futures: up 72 points to 8,839 points
- Wall Street: Dow Jones down 0.01%, S&P 500 down 0.14%, Nasdaq down 0.57%
- Europe: FTSE 100 up 1.24%, CAC 40 up 0.89%, DAX up 0.58%
- Spot gold: up 1.30% to USD4,130 per ounce
- Oil prices: Brent up 4.47% to USD95.07/barrel, US WTI up 3.12% to USD86.97/bbl
- AUD: down 0.13% at 69.99 US cents
- Bitcoin: down 0.71% to USD66,029.
The context: All three major US indices ended slightly lower on Wednesday, while the Philadelphia Semiconductor index rose 0.4%, extending its rebound for a third consecutive session after entering a bear market late last week. Investors are increasingly looking to upcoming earnings from the biggest artificial intelligence spenders to justify their hefty capital investments.
Second-quarter results were due after the closing bell from Alphabet and Tesla, the first of the “Magnificent Seven” to report. Alphabet shares fell 4.7% in after-hours trading despite posting 24% revenue growth driven by its cloud business, as free cashflow turned negative amid heavy spending on AI data centres.
Tesla shares also dropped around 4% in extended trading after reporting its first decline in free cashflow in more than two years, reflecting USD5.8 billion ($8.2 billion) in capital expenditures to expand its artificial intelligence and robotics operations.
Elsewhere, oil prices climbed after US President Donald Trump vowed to destroy an Iranian bridge or power plant every time Iran fires at a ship in the Strait of Hormuz, signalling little prospect of renewed negotiations after both sides escalated attacks. Brent crude briefly topped USD95 a barrel, pushing bond yields higher on renewed inflation concerns.
Locally, the Australian Bureau of Statistics will release its June labour force survey at 11:30am AEST.
