The Australian sharemarket looks set to open lower after Wall Street closed mixed on Friday, as investors pulled back rate-cut bets and rotated cautiously back into tech. Futures for the S&P/ASX 200 were down 17 points (-0.19%) at 8:30 am AEDT, after a week that saw the benchmark slide more than 2% and near its weakest levels since July.
Friday’s session offered no sign of dip-buying as the S&P/ASX 200 slid 1.36%, with the technology sector again taking the heaviest hit, down more than 4%. Energy was the only sector to finish in positive territory, up 0.2%, while financials and materials both declined more than 1%.
Wall Street steadies after sell-off
Overnight, US markets steadied after a volatile week. The S&P 500 finished fractionally lower (-0.05%), the Dow Jones slipped 0.65% and the Nasdaq ended three days of losses to add 0.13%. Traders shrugged off early weakness as some mega-cap tech names bounced back, but sentiment remained fragile after a string of hawkish comments from Federal Reserve officials dampened hopes of a December rate cut.
Markets are now pricing about a 40% chance of a cut next month — down sharply from 95% just a month ago. US 10-year Treasury yields rose to 4.15%, while the VIX volatility index held near 20, underscoring the market’s nervous tone.
In corporate news, Berkshire Hathaway disclosed a US$4.3 billion stake in Alphabet, trimming its Apple holding. Google gained on the update and after confirming new data-centre investments in Texas, while Tesla reversed early losses to finish slightly higher.
Asia and Europe join the risk-off mood
European markets extended their slide as bond yields climbed on renewed fiscal uncertainty in the UK. The FTSE 100 fell 1.2%, Germany’s DAX dropped 0.7% and the Euro Stoxx 50 lost 0.9%. Across Asia, Japan’s Nikkei tumbled 1.8% and Hong Kong’s Hang Seng was down 1.9%, pressured by disappointing Chinese economic data and a weaker property sector.
Commodities and currencies
A risk-off tone across global markets fed through into commodities, although not uniformly.
- Gold unwound recent gains, sliding 2.1% to roughly US$4,083/oz.
- Oil continued to firm, with WTI gaining 2.4% on renewed geopolitical jitters.
- Copper eased about 0.2% on softer China data.
- Iron ore was steady near US$103/t as traders assessed demand signals.
The Australian dollar hovered around US$0.654, steady despite the pullback in broader risk sentiment.
ASX outlook and local highlights
With global markets still digesting shifting Fed expectations, the local 10-year yield has climbed back to 4.49%, leaving equities sensitive to any further move higher.
BHP will be in focus after the English High Court found the miner liable under Brazilian law for the 2015 Fundão dam disaster. The company said it plans to appeal.
Corporate updates include Elders reporting earnings today, while Endeavour Group and McMillan Shakespeare hold annual meetings. Macquarie Group, L1 Long Short Fund and Plato Income Maximiser trade ex-dividend, which may create mild index pressure at the open.
What’s ahead
Globally, attention will be on the delayed US September jobs report now due on Thursday — the first jobs report since the six-week government shutdown — which could reset the Fed’s December calculus. Until then, markets will trade headline-to-headline, with volatility likely to remain elevated.
For the ASX, the immediate focus is whether the 4.50% yield line breaks again. If so, equities may struggle for traction; but if yields ease back and commodities stay firm, a short-covering bounce could arrive before week’s end.