ASX futures were pointing to a 0.4% drop in the Australian share market to 8,130 points early this morning.
Meanwhile in the US, equity markets continued a good run overnight, bolstered by strong results from big tech, with the S&P 500 and Nasdaq logging their eighth consecutive sessions in the green.
Tech leads the gains
The tech-heavy Nasdaq surged 1.5% to 17,710.74, led by Microsoft and Meta, while the S&P 500 rose 0.6% to 5,604.14.
The Dow Jones edged 0.2% higher to close at 40,752.96.
Investor sentiment was buoyed by Microsoft’s 7.6% jump after the company issued an upbeat outlook for its Azure cloud business.
Meta Platforms climbed 4.2% on better-than-expected advertising revenue.
Amazon.com rose 3.1% ahead of its earnings release, while Apple edged up 0.4% despite a court ruling against its App Store practices.
But not all corporate news was positive. Qualcomm dropped 8.9% following a revenue downgrade tied to US-China trade tensions, while Eli Lilly sank 11.7% after CVS Health removed its obesity drug Zepbound from reimbursement lists.
And Apple warned of a US$900 million (A$1.4 billion) increase in costs for the current quarter due to global tariffs, despite posting better-than-expected second-quarter sales and profit.
The company's share price slipped in after-hours trading as investor attention shifted to the potential financial drag from trade measures.
The tech giant said it faced minimal tariff effects in the previous quarter after moving inventory and diversifying its supply chains.
Apple supply chain post-tariff
And yet Apple expects tariffs to significantly impact its bottom line this quarter, unless there are changes to existing trade policies.
The majority of Apple’s US-bound iPhones will now be sourced from India, while iPads, Macs and Apple Watches will predominantly come from Vietnam.
Most Apple products for non-US markets will still be manufactured in China, so it is still exposed to risk in its global supply chain.
US jobless claims rose to 241,000 last week, while construction spending contracted 0.5% in March.
The ISM manufacturing index dipped to 48.7 in April, its lowest in five months, pointing to a softening industrial backdrop.
US Treasury yields climbed, with the 10-year note up 4 basis points to 4.22% and the 2-year yield rising 8 basis points to 3.70%, as inflationary pressures tied to tariffs and supply chains lingered.
Currencies and commodities
Currency markets were broadly weaker against the US dollar. The Australian dollar slipped to US$0.6382, while the euro eased to US$1.1292.
Oil rebounded sharply, with Brent gaining 1.8% to US$62.13 per barrel and WTI closing at US$59.24, pushed up by unexpected inventory drawdowns and renewed geopolitical tension after the US signalled tougher sanctions on Iranian crude buyers.
In contrast, gold futures dropped 2.9% to US$3,222.20 an ounce, slipping from record highs as profit-taking and lower demand during China’s Labour Day break weighed on the markets.
Iron ore also edged down 0.5% to US$99.25 per tonne on soft holiday-related demand.
On the agenda today are March retail sales and producer price index data.
Company activity includes AGMs for Iluka Resources, Iress and Kelly Partners.
In the US, attention turns to non-farm payrolls and factory orders, alongside earnings from energy giants Chevron and Exxon Mobil.
Other data
- FTSE: flat at 8,496 points
- EuroStoxx: flat at 527 points
- Spot gold: -1.4% to $US3,240/ounce
- Brent crude: +1.3% to $US61.88/barrel
- Iron ore: +0.1% to $US96.25/tonne
- Bitcoin: +0.2% to $US96,640
Source: the ABC