Australian shares to start lower after Wall Street losses

The news: The Australian sharemarket is set to start lower on Wednesday, in line with declines on Wall Street where fading hopes for early rate cuts and selling in some heavyweight stocks dampened sentiment.

The numbers: The Dow Jones index was trading 0.94% lower, while the broader S&P 500 slipped 0.64% and the tech-heavy Nasdaq fell 0.55%. In the local market, ASX 200 futures were trading 3 points or 0.04% lower at 7378 points at 7:00am AEDT on Wednesday.

The context: US stocks dropped after mixed earnings from Morgan Stanley and Goldman Sachs pressured banks, and sell-offs in Boeing and Apple also weighed. Sentiment was dampened further after a Federal Reserve official said there should be no rush to cut interest rates even though inflation is likely on track to meet the Fed's 2% target, prompting traders to pare expectations of rate cuts starting in March as US Treasury yields also lifted. Wall Street rose last week as investors continued to bet on an early start to the Fed's monetary policy easing cycle, despite a lack of supporting voices among policymakers and mixed inflation data.