Despite gains yesterday, the ASX is expected to slide today. ASX 200 futures are trading 8 points lower, down -0.10% as of 8:30 am AEST.
Today’s dip follows another record-setting day for the S&P 500 and Nasdaq after cooler-than-expected US producer price data and bumper earnings from Broadcom (NASDAQ:AVGO).
As our colleagues at the US news desk wrote: US stocks reached record highs on Thursday, driven by cooling inflation and expectations of a Federal Reserve pause on interest rate cuts.
The S&P 500 closed over 0.2% higher and the Nasdaq Composite gained about 0.3%, marking the fourth consecutive record close for both indices. The Dow Jones was an outlier, finishing around 0.2% lower.
Despite the Federal Reserve scaling back its rate cut projections from three to one, investors remain optimistic, anticipating two cuts starting in September. The producer price index for May fell by 0.2%, indicating easing inflation.
Tesla (NASDAQ:TSLA)'s stock surged by 3% following shareholder approval of a $56 billion pay package for CEO Elon Musk. Additionally, a 12% increase in Broadcom shares and a 3% rise in Nvidia boosted the tech sector, with Microsoft (NASDAQ:MSFT) and Apple (NASDAQ:AAPL) also hitting record highs.
“Tech stocks are higher in afternoon trading, but then the Nasdaq 100 has been a rare island of bullishness in a generally negative week for equity markets," IG's Chris Beauchamp commented.
"The S&P 500 has only suffered minor losses, thanks of course to its tech contingent.”
What else happened overnight? (source Commsec)
European sharemarkets
Declined on Thursday. Auto stocks dropped 2.3% as concerns grew over China's potential response to the EU's new tariffs on Chinese electric vehicles, aimed at addressing what Brussels considers excessive subsidies from Beijing. Banks fell 2.4% following a rise in Italian borrowing costs to their highest level since November at an auction. Euro zone industrial production contracted by 0.1% in April, contrary to the expected increase of 0.2%.
- The FTSEurofirst 300 index fell by 1.2%.
- In London, the UK FTSE 100 index decreased by 0.6%.
Currencies
Showed mixed movements against the US dollar.
- The Euro declined from US$1.0815 to US$1.0732 and was near US$1.0735 at the US close.
- The Australian dollar fell from 66.74 US cents to 66.24 US cents and was near 66.35 US cents at the US close.
- The Japanese yen strengthened from 157.31 yen per US dollar to JPY156.59 and was near JPY157.05 at the US close.
Commodities
Global oil prices rose slightly, influenced by rising US crude and fuel supplies and expectations of a delayed start to US Federal Reserve interest rate cuts.
- The Brent crude price increased by 15 US cents to US$82.75 a barrel.
- The US Nymex crude price rose by 12 US cents to US$78.62 a barrel.
Base metal prices fell.
- Copper futures dropped 1.6% following the US Federal Reserve's decision to delay a potential interest rate cut.
- Aluminium futures decreased by 0.8%.
- Gold futures fell by US$36.90 or 1.5% to US$2,363.10 an ounce due to cooler-than-expected US producer price data and profit-taking.
- Spot gold was near US$2,303 an ounce at the US close.
- Iron ore futures increased by 70 US cents or 0.7% to US$107.12 a tonne, supported by Beijing's efforts to boost its struggling property sector, despite weak near-term demand and high portside stocks in China limiting further gains.
What about small caps?
The S&P/ASX Small Ordinaries (XSO) gained 0.50% to 2,962.00. Over the past five days, it is down 1.11%.
It has been a quiet start in the news front today, but you can read about the following and more throughout the day.