The ASX 200 is expected to open higher after US markets stumbled again overnight, with technology stocks dragging Wall Street lower ahead of a pivotal central bank gathering. Futures point to a 23-point (0.25%) gain at the open, setting the stage for another big day of corporate earnings on the local exchange.
Wall Street falters ahead of Powell speech
The S&P 500 fell 0.24% overnight, extending its losing streak to a fourth session, while the Nasdaq dropped 0.67% as megacap tech names like Apple, Alphabet and Micron weighed on the index. The Dow bucked the trend, eking out a 0.04% gain.
Market nerves were stoked by the release of Federal Reserve minutes, which reiterated that inflation remains the greater risk compared with slowing employment. Investors are now squarely focused on Fed Chair Jerome Powell’s upcoming speech at the Jackson Hole symposium in Wyoming, due Saturday AEST, for clues on whether a September rate cut is assured.
Palantir extended its decline with a 20% slide from recent highs, its worst losing streak in over a year, while Target shares tumbled 6% on softer sales and traffic. Estee Lauder also warned of tariff-related headwinds to its earnings outlook.
Bond markets, meanwhile, saw modest gains as the 10-year US Treasury yield edged down to 4.29%.
ASX yesterday: defensives up, cyclicals hit
The S&P/ASX 200 rose 0.25% on Wednesday to close at 8,918 points, though the headline gain masked sharp divergences among sectors.
Investors rotated into defensives as rate cuts draw closer, lifting consumer discretionary (+1.93%), real estate (+1.80%), financials (+1.43%) and utilities (+1.37%). On the other side, cyclical and higher-valuation names bore the brunt: materials fell 2.32%, IT dropped 1.28% and energy slipped 1.16%.
The sell-off was most acute in critical minerals, with Pilbara Minerals down 7.9% and Lynas Rare Earths off 7.4% following a steep fall in lithium carbonate futures in China. James Hardie Industries plunged 28% after disappointing earnings and guidance, its worst day since 1973.
Commodities and currencies
Oil prices found support, bouncing back after a tough start to the week. US crude inventories fell by 6 million barrels — more than triple forecasts — helping lift WTI 1.84% to US$62.84 a barrel and Brent 1.76% to US$66.95.
Gold rose 1% to US$3,351 an ounce, supported by softer bond yields and a weaker US dollar, while silver added 1.35%. Base metals were steady, with copper flat and zinc up 0.7%. Iron ore held just below US$102 a tonne.
The Australian dollar hovered at US64.3 cents against the greenback, while Bitcoin gained 1% to more than US$114,400.
Local earnings in focus
Thursday is shaping up as one of the busiest days of reporting season, with results due from Brambles, Goodman Group, Northern Star Resources, Whitehaven Coal, Super Retail Group, Megaport, Telix and more than a dozen other companies across the index.
Investors will also be watching how heavyweights such as James Hardie and Yancoal trade after brutal sell-offs on Wednesday, as well as “day two” reactions for beats like The Lottery Corp.
Stocks trading ex-dividend today include JB Hi-Fi, IAG, Washington H. Soul Pattinson, AMP and Brickworks.
What’s ahead
On the domestic data front, S&P Global’s flash PMIs for August offer an early read on manufacturing and services activity. Internationally, UK and European PMI releases will follow later today, while US jobless claims, home sales and PMI figures round out the calendar ahead of Jackson Hole.
With defensives in favour locally and a nervous tech-led selloff continuing abroad, today’s earnings flood could decide whether the ASX 200 can extend its record-setting run — or whether volatility wins out.