Australian shares are poised to open slightly higher, with ASX 200 futures up 13 points (0.1%) to 8,612 after Wall Street strengthened on renewed expectations of a Federal Reserve rate cut.
The S&P/ASX 200 closed 15.5 points higher (+0.18%) on Wednesday. The local market initially jumped on softer-than-expected GDP data before settling back as traders reassessed the outlook for the Reserve Bank of Australia.
Uranium and coal stocks outperformed, driving the Energy (XEJ) sector up 0.8%, while eight of the 11 major sectors finished in positive territory.
Logistics software heavyweight WiseTech Global (WTC) rallied 4.5% following management commentary at its investor day, marking the strongest performance among large caps.
GDP data showed the economy expanded 0.4% in the September quarter, undershooting forecasts and briefly sparking optimism for potential rate cuts in 2025.
Before the data release, a hotter inflation print had bond markets pricing out any further RBA cuts this cycle and assigning a 95% probability that the next move would be a hike in 2026.
eToro analyst Farhan Badami said the numbers indicate the economy is not overheating as feared, easing immediate pressure on the RBA: “This doesn’t mean a rate cut is suddenly on the table for early 2026… but the possibility of a rate hike in 2026 is still very much alive.”
Wall Street rises on renewed rate-cut expectations
US markets advanced after economic data fuelled hopes the Federal Reserve may still cut rates. US companies shed the most payrolls since early 2023, signalling labour-market cooling, while services activity expanded slightly and price pressures eased.
The reaction across major US indices:
- Dow Jones: +408 points (+0.9%)
- S&P 500: +20 points (+0.3%)
- Nasdaq: +40 points (+0.2%)
Chip stocks led gains:
- Marvell Technology surged 7.9% after agreeing to buy Celestial AI for US$3.25 billion.
- Microchip Technology jumped 12.2% following upgraded Q3 expectations.
- Retailer American Eagle Outfitters rallied 15.1% on stronger sales guidance.
- Microsoft slipped 2.5% after reports it lowered AI software sales quotas.
Europe mixed as tech rallies but banks weigh
European markets ended mostly flat, with the FTSEurofirst 300 up 0.1%. Technology shares gained 1.3%, extending a four-session rally, while insurers and banks dragged, falling 1.4% and 0.9%, respectively.
The UK FTSE 100 dipped 0.1%, reflecting broader caution ahead of central bank meetings and geopolitical developments.
Currencies strengthen against the US dollar
Major currencies pushed higher against the greenback in European and US trade:
- Euro: rose from US$1.1636 → US$1.1677, holding near US$1.1665 at the US close
- Australian dollar: lifted from US$0.6573 → US$0.6600
- Japanese yen: firmed from ¥155.75/US$ → ¥155.00, ending near ¥155.30
Commodities: Copper hits record; oil lifts on Russia-US tensions
Oil rises after Russia–US talks fail
- Global oil prices edged higher after Russia said talks with the US over a potential Ukraine peace deal failed to produce progress, diminishing the prospect of sanctions relief.
- Brent crude: +US22c (+0.4%) to US$62.67/bbl
- WTI/Nymex: +US31c (+0.5%) to US$58.95/bbl
- US crude inventories rose 574,000 barrels, versus expectations for a drawdown of 821,000 barrels.
Copper surged to near-record highsm while base metals were broadly stronger:
- Copper: +2.8% to near record levels on a weaker USD, supply risks and shrinking warehouse stocks
- Aluminium: +0.6%
- Gold edges higher on softer US payrolls
- Gold strengthened as the weak US labour data supported rate-cut expectations:
- Gold futures: +US$11.70 (+0.3%) to US$4,232.50/oz
- Spot gold: near US$4,207/oz at the US close
- Iron ore firms ahead of key China meetings
- Iron ore futures rose US42c (+0.4%) to US$107.77/t as traders await China’s upcoming economic planning sessions for guidance on growth targets and stimulus measures.
Looking ahead
Australia
- Household spending data
- International goods trade
- Bendigo & Adelaide Bank investor day
United States
- Initial jobless claims
- Challenger job cuts
- Earnings from Kroger, HPE, Hormel Foods, Ulta Beauty, Dollar General, DocuSign and Brown-Forman