The ASX is expected to open higher this morning, driven by renewed optimism on Wall Street.
US shares surged on Thursday, with the S&P 500 index reaching an all-time high, driven by enthusiasm for artificial intelligence (AI) and positive economic data.
US indices record gains
All three major indices posted gains, with the Dow Jones up 260 points (0.6%), the S&P 500 climbing 0.4% to finish at a record high of 5,745, and the Nasdaq soaring 108 points (0.6%).
Micron Technology (NASDAQ:MU)'s upbeat earnings forecast ignited renewed enthusiasm for AI, pushing the stock up 14.7%.
The company’s projected revenue for the first quarter surpassed expectations, reflecting strong demand for the memory chips used in AI computing.
Investor sentiment was further bolstered by a solid US jobless claims report, which eased concerns about the labour market.
Initial jobless claims dropped by 4,000 to 218,000, surpassing the forecast of 223,000, while the US economy expanded at an annualised pace of 3.0% in the June quarter, slightly above predictions.
Copper miners like Freeport-McMoRan (NYSE:FCX) gained 7.5%, while lithium producers Albemarle and Arcadium Lithium saw respective increases of 9.9% and 8.9%.
The optimism extended to European markets, where China-exposed luxury brands, including LVMH and Hermes, rallied 9% each, contributing to a 1.3% rise in the FTSEurofirst 300 index.
On the bond market, US Treasury yields rose, with the 10-year yield up two basis points to 3.80%.
Currencies and commodities
Currencies strengthened against the US dollar, with the Euro reaching US$1.1175, and the Australian dollar settling at US$0.6895.
In energy news, global oil prices fell over 2% after reports suggested Saudi Arabia might abandon its US$100 per barrel target to boost output.
Despite metals soaring, oil prices have taken a hit amid concerns over increasing supply. Supply disruptions in Libya, which have threatened the market for several weeks, appear to be easing, potentially allowing more oil to flow back into the market in the coming days.
But the market was unsettled by a report from The Financial Times indicating that Saudi Arabia, the world's largest crude exporter, may proceed with its planned production hikes in December.
The oil giant is reportedly prepared to drop its unofficial price target of US$100 per barrel, signalling an acceptance of a period of lower oil prices.
Brent crude dropped to US$71.60 a barrel, while US Nymex crude fell to US$67.67.
China’s economic stimulus measures, including monetary policy easing, provided a significant boost to metal markets, driving renewed investor confidence in the sector.
Base metals climbed – copper surged back above US$10,000 per tonne, with copper futures up 3.5% and aluminium surging 3.7%.
Silver climbed to US$32 per ounce, its highest level since 2012, as of 7am AEST.
Gold prices also climbed as global interest rate cuts boosted investor demand for bullion.
Gold futures increased by US$10.20 or 0.4% to US$2,694.90 an ounce, while spot gold traded near US$2,672 an ounce after hitting a record high of US$2,685.42 earlier in the day.
Iron ore reached US$100 per tonne, and iron ore futures rose by 29 US cents or 0.3% to US$92.54 a tonne, supported by China’s stimulus measures, which injected further market confidence amid fading momentum from earlier monetary easing.