It’s going to be a quiet day on Australian markets ahead of the long King’s Birthday weekend, with shares tipped to edge up slightly.
US sharemarkets were mixed overnight in anticipation of a crucial labour market report.
The Dow Jones index rose 79 points or 0.2%, the S&P 500 index was near flat, and the Nasdaq index shed 15 points or 0.1%.
Tech stocks weaken during day
The S&P 500 and Nasdaq initially rose to fresh intraday record highs before retreating as technology stocks dipped.
Bloomberg reported the US is opening antitrust investigations into Microsoft (NASDAQ:MSFT) and Nvidia over their dominance in artificial intelligence – Nvidia shares slid 1.2% while Microsoft edged up 0.1%.
Power and electrical equipment companies continued to decline, despite expectations of benefiting from AI and data centre demand.
Vistra fell 6.2%, marking the biggest drop in the S&P 500 index.
Lululemon Athletica (NASDAQ:LULU) rose 4.8% after exceeding first-quarter profit and revenue expectations.
Europe welcomes rate cut
European shares closed higher on Thursday following the European Central Bank's (ECB) first interest rate cut since 2019, which had analysts chattering.
The bank lowered its deposit rate to 3.75% from 4.0%.
The ECB's new forecasts project inflation to average 2.2% in 2025, up from a previous estimate of 2.0%, suggesting inflation will remain above the 2% target well into next year.
European banks led sectoral gains, rising 1.4%. The FTSEurofirst 300 index gained 0.7%, hitting record highs. The UK FTSE 100 index ended up 0.5%.
In US economic data, initial jobless claims rose by 8,000 to 229,000 last week, slightly above the forecast of 220,000.
Challenger job cuts fell by 1.5% to 63,816 in May, below the expected 75,000.
Nonfarm productivity increased by 0.2% in the first quarter, exceeding the flat forecast, while unit labour costs rose 4% in the quarter, below the expected 4.9%.
The trade deficit widened by US$6 billion to US$74.6 billion in April, less than the forecast of US$76.5 billion.
Currencies and commodities
Currencies strengthened against the US dollar in European and US trade. The Euro rose from US$1.0863 to US$1.0898, the Australian dollar lifted from US$0.6633 to US$0.6672, and the Japanese yen firmed from 156.39 yen per US dollar to JPY155.48.
Global oil prices rose 2% yesterday following the ECB's interest rate cut and reassurances from OPEC+ ministers about potential changes to the latest oil output agreement.
Brent crude increased by US$1.46 or 1.9% to US$79.87 a barrel, while US Nymex crude gained US$1.48 or 2% to US$75.55 a barrel.
Base metal prices climbed, with copper futures rising 1.5% on optimism over central bank rate cuts boosting economic growth, though gains were capped by concerns over sluggish demand. Aluminium futures gained 1.3%.
The gold futures price increased by US$15.40 or 0.6% to US$2,390.90 an ounce, driven by weaker-than-expected US jobs data, raising hopes of a Federal Reserve interest rate cut later this year.
Spot gold was near US$2,374 an ounce. Iron ore futures gained US$1.48 or 1.4% to US$108.50 a tonne, buoyed by portside restocking ahead of a holiday in China and speculation of possible steel output cuts.