The Australian sharemarket is on track to open sharply higher on Monday, with futures pointing to a 0.94% rise at the open, after US stocks surged on Friday night following a market-moving speech from Federal Reserve Chair Jerome Powell. Investors took Powell’s remarks at Jackson Hole as a signal that the Fed is preparing to cut rates as soon as September.
Wall Street rockets higher on Powell speech
Wall Street snapped its recent losing streak in emphatic style to close out last week. The S&P 500 climbed 1.52% to 6,467, the Dow Jones jumped 1.89% to a fresh record high, and the Nasdaq gained 1.88%. Small caps led the way, with the Russell 2000 surging 3.9% to year-to-date highs.
Powell acknowledged tariffs were nudging inflation higher but stressed that the balance of risks had shifted, with slowing growth and employment now weighing more heavily than price pressures. He cited payroll growth slowing to just 35,000 a month over the last quarter, compared with 168,000 in 2024, and GDP growth of 1.2% in the first half of 2025 — half last year’s pace.
Markets seized on the dovish tone: futures now price a 90% chance of a September rate cut, up from 75% before Powell’s speech. US bond yields fell sharply, with the two-year down 10 basis points to 3.70% and the 10-year easing to 4.26%. The VIX volatility index sank 14% as risk appetite roared back.
Sector gains were broad, with consumer discretionary stocks up 3.2%, energy up 2.0% and materials up 1.7%. Tech also rebounded, supported by Tesla (+6.2%) and strong gains across the megacaps.
ASX catch-up: CSL sinks, Zip soars
The S&P/ASX 200 closed 51.7 points lower on Friday, down 0.57% to 8,967.
Healthcare was the biggest drag after CSL slumped another 4.2% — extending its post-results rout to 20% since Tuesday’s earnings miss. Consumer staples (-2%) and real estate (-1.8%) also saw losses.
There were bright spots, with Zip Co. surging 20% on upbeat results, giving financials a modest boost, while uranium stocks climbed, helping energy finish in the green. Information technology edged up 0.3%, and communication services added 0.1%, but these gains were not enough to offset broader weakness.
Commodities and currencies
Gold steadied at US$3,371 per ounce, while silver jumped about 2%. Base metals were firmer, with copper at US$8,903 per tonne and zinc up 1.4%. Iron ore dipped 0.1% to US$101.4 per tonne.
Oil prices were little changed on Friday, with WTI holding near US$63.8 per barrel (bbl) and Brent at US$67.8/bbl, though both benchmarks posted weekly gains.
The Aussie dollar rallied with risk sentiment, back near US65c against the greenback after briefly dipping below 64c earlier in the week. Bitcoin slid 1.9% to around US$113,000, while Ethereum edged higher.
Corporate earnings deluge
Today brings one of the busiest sessions of reporting season, with results due from heavyweights across multiple sectors.
Large-cap names reporting include:
- Pilbara Minerals (PLS)
- Bendigo & Adelaide Bank (BEN)
- Santos (STO)
- Endeavour Group (EDV)
- Reece (REH)
- Perenti (PRN)
Mid- and small-cap earnings are also due from companies including Kogan.com, Adore Beauty, Polynovo, IPD Group, and Race Oncology.
Investors will be closely watching “day two” moves for Friday’s outsized winners and losers, including Zip, Guzman Y Gomez and CSL.
Looking ahead
Locally, there are no major economic releases today, but the reporting season flood will dominate trade. Later this week, investors will also digest July CPI data in Australia and the Fed’s preferred inflation gauge — core PCE — in the US.