Australian stocks set to drop after Wall St losses

The news: The Australian sharemarket is set to open sharply lower after overnight losses for the major US indices, with investors nervous ahead of a speech by US Federal reserve Chair Jay Powell.

The numbers: The Dow Jones index ended 1.08% lower, the broader S&P 500 lost 1.35% with each of its sectors lower. The tech-heavy Nasdaq fell 1.87% as the AI fuelled rally in tech stocks lost momentum. In the local market, ASX 200 futures were trading 91 points or 1.28% lower at 7039 points at 0700 AEST on Friday.

The context: Data overnight showed fewer workers applied for US unemployment benefits last week pointing to a still-strong jobs market, and reviving investor concerns that the Fed may be inclined to keep higher interest rates for longer. Central bankers are gathered for an annual symposium in Jackson Hole, Wyoming, where Powell will make a highly anticipated speech on the economic outlook tonight. In the local market, investors will be watching for earnings from Wesfarmers, Ardent Leisure and Pexa among others.

What they said: "As much as investors want to focus on Nvidia and want to focus on tech - and it's been a good year so far - this is still a market that is Fed obsessed. This is still all about what is Jay Powell going to say tomorrow to mess things up... that may lead investors to be sellers instead of buyers," - Jake Dollarhide, CEO of Longbow Asset Management in Tulsa, Oklahoma told Reuters.