The Australian sharemarket is set to open slightly lower, with ASX 200 futures down 7.5 points (-0.08%) at 9:30 am AEST. That comes after the benchmark eked out a 0.22% gain on Thursday, while Wall Street pushed to new records overnight with the S&P 500 breaking through the 6,500 mark for the first time.
Wall Street: Records and earnings tension
US markets extended their rally, with the S&P 500 up 0.32% to 6,502, the Dow adding 0.16% and the Nasdaq climbing 0.53%. The Russell 2000 also ticked higher, up 0.2%, capping a strong month for small caps.
Nvidia once again dominated market chatter, beating Q2 expectations and guiding higher for Q3. Still, analysts flagged risks that demand may be plateauing as data centre growth runs into limits and competition in China intensifies. Even so, more than 10 brokers lifted price targets, pointing to long-term AI spending as the bigger story.
Elsewhere, Google committed US$9 billion to cloud and AI infrastructure in the US state of Virginia, Tesla’s European sales slumped 40% in July, and Nike announced a small round of layoffs.
Bond markets showed little reaction to the Fed turmoil, with US 10-year yields easing to 4.21%. Traders continue to bet on Fed policy being steered by political pressure, though for now equity markets appear to be taking it in stride.
ASX recap: Banks lift, energy drags
The S&P/ASX 200 closed 19.5 points higher on Thursday, up 0.22% to 8,980. Gains in the big four banks outweighed weakness in resources and energy, with the market closing at session highs.
Financials (+1.1%), real estate (+1.0%) and industrials (+0.9%) led the day, joined by consumer staples (+0.9%) on follow-through strength from Coles. Materials (-0.5%) and health care (-1.7%) lagged, while energy (-2.4%) was the weakest link as oil prices eased.
Small caps underperformed locally, with the Small Ordinaries down nearly 0.7%. Tech names also fell, with the All Tech index slipping 0.9%.
Commodities and currencies
Gold rose another 0.6% to US$3,417 an ounce, extending its climb to four of the past five sessions. Silver gained 1.5% and copper advanced 1.1% to US$8,937 per tonne. Iron ore was steady at US$101.7 per tonne.
Oil prices stabilised after recent declines, with WTI up nearly 0.3% to US$64.3 per barrel (bbl) and Brent up 0.4% to US$68.3/bbl.
The Aussie dollar was steady near US$0.653. Bitcoin traded around US$112,200 (+0.7%), while Ethereum softened slightly in local terms.
ASX today: final reporting season rush
On the last day of reporting season, results are due from Austal, Bapcor and Pexa among larger names, while a host of smaller companies, including Recce Pharmaceuticals and Pointsbet, are also reporting.
In other small caps news early on Friday, Asian Battery Metals PLC (ASX:AZ9) has confirmed Phase 4 drilling will begin shortly at its Oval copper-nickel-PGE discovery in Mongolia, following encouraging down-dip extensions in recent holes. Percheron Therapeutics Ltd (ASX:PER, OTC:PERCF) announced receipt of a $1.43 million R&D tax rebate, which will help advance development of its oncology candidate HMBD-002 ahead of planned trial updates later this year.
Traders will also be eyeing “day two” moves for some of the week’s biggest earnings winners, including IDP Education (+29% yesterday), Eagers Automotive (+12%) and Qantas (+9%), with brokers already tempering enthusiasm with valuation downgrades.
Looking ahead
Locally, July CPI is due at 11:30 am AEST alongside private sector credit data, both of which could influence expectations around RBA cuts later this year.
On Wall Street, tonight brings July personal spending and the Fed’s preferred inflation measure — core PCE — ahead of a long weekend with US markets closed for Labor Day on Monday.