Wall Street decline to weigh on Australian stocks

The news: The Australian sharemarket is set to open weaker after major US indices ended sharply lower on Friday as caution returned ahead of this week's Federal Reserve policy meeting.

The numbers: The Dow Jones index fell 0.83%, the broader S&P 500 dropped 1.22% while the tech-heavy Nasdaq suffered a 1.56% decline. In the local market, ASX 200 futures were trading 41 points or 0.56% lower at 7250 points at 0700 AEST on Monday.

The context: Strong economic data last week eased concerns about a US recession but traders are still nervous about the Federal Reserve’s path on interest rates. While the US central bank is almost certain to hold rates at its 20 September policy meeting, bets are somewhat split on the likelihood of a further pause in November. In local news, new RBA Governor Michele Bullock starts her seven-year term, with the bank’s next policy meeting scheduled for 3 October.