Australian shares to start higher despite mixed Wall Street signal

The news: The Australian sharemarket is poised to start higher despite a mixed close on Wall Street as a subdued US inflation report stoked hopes for more Federal Reserve rate cuts.

The numbers: The Dow Jones index ended 0.33% higher, while the broader S&P 500 lost 0.13% and the tech-heavy Nasdaq declined 0.39%. In the local market, ASX 200 futures were up 22 points or 0.27% at 8,277 points at 7am AEST on Monday.

The context: US stocks ended mixed but all three indices were trading at or near recent record highs as the market priced in a soft economic landing that will enable the Fed to lower rates. It came after the US Commerce Department reported a moderate rise in consumer spending while inflation pressures continued to ease.

Separately, the University of Michigan's final September reading on consumer sentiment came in at 70.1, surpassing economists' expectations of 69.3, according to a Reuters poll. Investors now slightly favor a 50-basis-point cut at the Fed's next meeting with a 52.1% chance, up from a coin toss before the data, as per the CME Group's FedWatch Tool.