The Australian share market is expected to rise today following a strong showing on Wall Street overnight, where the S&P 500 and Nasdaq achieved record highs for the third consecutive day despite ending below their daily peaks.
This surge came after US consumer price data were softer than expected.
At close, the Dow Jones index had dipped slightly by 35 points (0.1%), while the S&P 500 index had gained 0.9% and the Nasdaq rose 265 points (1.5%).
Fed signals slow cuts
It seems the Federal Reserve has taken a conservative approach to monetary policy, signalling only one interest rate cut this year.
The US central bank held interest rates steady and delayed potential rate cuts to possibly December, projecting a single quarter-percentage-point reduction for the year.
For investors, this will be an adjustment from the three cuts anticipated in March.
Fed chair Jerome Powell emphasised the need for more confidence in inflation returning sustainably to 2%.
At any rate, US traders increased their bets on a rate cut by September following data showing a slowdown in the core consumer price index.
Oracle (NYSE:ORCL) shares surged by 13.3% after projecting significant revenue growth and Apple shares (NASDAQ:AAPL) rose 2.9% following the unveiling of its Apple Intelligence plans.
Europe strong
Trading was brisk on European share markets, with the real estate sector climbing 2.5% after US inflation data buoyed hopes of policy easing by the Fed.
The continent-wide FTSEurofirst 300 index rose 1% and the UK FTSE 100 index increased by 0.8%.
German consumer prices, harmonised with EU standards, saw a year-on-year rise of 2.8% in May.
Commodities and currencies
Global oil prices increased, driven by Middle Eastern tensions, with Brent crude rising by 68 US cents to US$82.60 a barrel and US Nymex crude gaining 60 US cents to US$78.50 a barrel.
Base metal prices, including copper and aluminium, saw gains following the inflation data, raising expectations of a Fed rate cut.
Gold futures rose by US$28.20 to US$2,354.80 an ounce, while iron ore futures edged up by 15 US cents to US$106.42 a tonne.
In currency markets, the Euro and Australian dollar strengthened against the US dollar. The Euro rose to US$1.0850, and the Australian dollar increased to US67.03 cents.
Back home, the Australian Bureau of Statistics is set to release crucial labour force data at 11:30am AEST, with the unemployment rate in May expected to decrease to 4% from April's 4.1%.
We’ll also get some insight from the CBA’s Household Spending Insights.
Market snapshot
- Australian dollar: Flat at 66.64 US cents.
- S&P 500: +0.9% to 5,421 points.
- Nasdaq: +1.5% to 17,608 points.
- FTSE: +0.8% to 8,215 points.
- EuroStoxx: +1.1% to 522 points.
- Spot gold: +0.3% to $US2,323/ounce.
- Brent crude: +0.7% to $US82.46/barrel.
- Iron ore: +0.8% to $US104.55/tonne.
- Bitcoin: +0.7% to $US68,555.
Source: ABC
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