Australian shares to rise, tracking solid gains on Wall Street
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The news: The Australian sharemarket is set to track overnight gains on Wall Street, where encouraging comments from US Federal Reserve Chair Jerome Powell stoked hopes for interest rate cuts.
The numbers: The Dow Jones index ended 1.09% higher, while the broader S&P 500 climbed 1.02% and the tech-heavy Nasdaq advanced 1.18%. In the local market, ASX 200 futures were up 70 points or 0.89% to 7,870 points at 7:00am AEST on Thursday.
The context: US stocks rose after Powell’s comments, fuelled by gains in Nvidia and other Wall Street heavyweights ahead of inflation data and quarterly earnings reports due this week.
Powell said in his second day of Congressional testimony that the US is "no longer an overheated economy" and the central bank will not wait for inflation to fall to its 2% target before cutting rates. Expectations of a 25-basis-point rate cut by September ticked up to 74% from around 70% on Tuesday, according to CME's FedWatch.
US inflation data due this week include the consumer price Index on Thursday and the producer price Index report on Friday. Second-quarter earnings season also kicks off this week with major US banks reporting on Friday.
The source: Reuters
