Investing.com - The Australian stock market is expected to lag behind its international counterparts in the week's opening session due to a significant drop in iron ore prices.
Despite a strong performance from Wall Street, where the tech-focused NASDAQ Composite and the benchmark S&P 500 hit new record highs on Friday, futures suggest that the S&P/ASX 200 Index is likely to open 0.1% lower.
Iron ore futures traded in Singapore saw a 3% decline to $US110.25 a tonne, driven by concerns over Chinese demand and indications of a surplus in supply.
The surge in US shares, which also propelled the MSCI global stocks index to record highs, was fueled by recent US jobs data. The data revealed a slowdown in hiring last month, with the unemployment rate rising to 4.1% - the highest level since 2021.
In response to this, traders have fully factored in two Federal Reserve rate cuts this year, with the first expected in November. The likelihood of a rate cut in September has also been increased to 72%, up from a 58% chance just a week ago.
Meanwhile, the Australian dollar remains steady around a six-month peak at US67.49¢. This stability is supported by expectations that the Reserve Bank could raise rates while other central banks
On the bond markets, Australia 10-Year and 2 year rates were at 4.355% and 4.201%, respectively.