Australian stocks set to track drop on Wall Street

The news: The Australian sharemarket is set to start lower following a lower close for major indices on Wall Street on Friday after a key inflation report.

The numbers: On Friday, the Dow Jones index ended 0.47% lower, while the broader S&P 500 and the tech-heavy Nasdaq lost 0.27% and 0.14% respectively, with both indices posting their biggest monthly percentage drops of the year. In the local market, ASX 200 futures were trading 38 points or 0.54% lower at 7048 points at 0700 AEST on Monday.

The context: Friday’s weaker close on Wall Street came despite data showing growth in a key US inflation index slowed to 3.9% in August, as investors adjusted expectations for interest rates to remain higher for longer. In the local market too, sentiment remains cautious ahead of the RBA’s board meeting on Tuesday, where the central bank is mostly expected to keep rates on hold.