Australian shares to start on backfoot after Wall Street sell-off

The news: The Australian sharemarket is edge lower at the start after declines on Wall Street where investors worried a resilient economy could prompt higher rates for longer.

The numbers: The Dow Jones index ended 0.76% lower while the broader S&P 500 dropped 1.18% and the tech-heavy Nasdaq dropped 1.76% after data sowed a 4.9% quarterly annualized jump in third-quarter US GDP, the strongest reading in nearly two years. In the local market, ASX 200 futures were trading just 3 points or 0.04% lower at 6810 points at 0700 AEDT on Friday.

The context: While all three major US stock indexes ended in the red, the tech-heavy Nasdaq was the worst affected, weighed down by the mega-cap momentum stocks in the face of cloudy earnings guidance. The robust economic data also underlined investor worries about restrictive Federal Reserve policy.

"Investors were "digesting the economic data through the lens of an aggressive Federal Reserve ... it challenges the notion that the Fed will start lowering rates in 2024," Greg Bassuk, Chief Executive Officer at AXS Investments in New York told Reuters.