Australian shares to open lower as tech stocks weigh on Wall Street
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The news: The Australian sharemarket is set to open lower after US stocks ended slightly down overnight, as weakness in technology stocks offset signs of economic resilience and easing price pressures. Investor sentiment was supported by comments from Federal Reserve chair Kevin Warsh saying inflation risks have eased.
The numbers: Updated at 7:48am AEST:
- ASX futures: down 23 points to 8,687 points
- Wall Street: Dow Jones down 0.03%, S&P 500 down 0.22%, Nasdaq down 0.66%
- Europe: FTSE 100 down 0.18%, CAC 40 down 0.79%, DAX up 0.18%
- Spot gold: up 0.59% to USD4,031 per ounce
- Oil prices: Brent down 2.77% to USD70.93/barrel, US WTI down 2.26% to USD67.92/bbl
- AUD: down 0.38% at 68.93 US cents
- Bitcoin: up 3.77% to USD60,762.
The context: All three major US indices closed lower on Wednesday, as weakness in tech stocks offset gains in financials and consumer discretionary shares. However, shares in Meta Platforms rallied 8% after Bloomberg reported it is developing a cloud business to sell excess AI computing capacity.
Banks and other economically sensitive stocks outperformed after data from the Institute for Supply Management showed that US manufacturing activity slowed in June but remained in expansionary territory with a reading of 53.3.
Despite the June’s slowdown, manufacturing has expanded for sixth consecutive month, supported by ongoing investment in artificial intelligence, which has helped offset the impact of the US-Israel conflict with Iran on factory activity, according to Reuters.
Investors parsed comments from Federal Reserve chair Kevin Warsh for clues on the interest rate outlook. While Warsh declined to comment on the likelihood of a rate hike this month, he said inflation risks had eased since the last FOMC meeting. Traders trimmed expectations of a further rate hike as Warsh spoke but continued to price in at least one rate hike this year, according to data compiled by LSEG.
Elsewhere, oil prices fell after US Vice President JD Vance said discussions with Iran were progressing well during indirect technical talks in Qatar over the Strait of Hormuz on Wednesday, adding Washington would not resume full-scale military action unless necessary, Reuters reported.
Locally, the Australian Bureau of Statistics will release international trade in goods data at 11:30am AEST.
