Australian shares are expected to open higher today, with futures reversing earlier losses after a late improvement in sentiment on Wall Street and strong after-market results from Micron Technology.
ASX 200 futures were up 16 points, or 0.2%, at 8,810, pointing to a firmer start for the local market.
The shift came as investors weighed lower oil prices, a pullback in Bitcoin and easing bond yields, all of which helped temper concerns about the inflation outlook.
The yield on the US 10-year Treasury fell 10 basis points to 4.39%, while Australian investors are now focused on May labour force data due at 11.30am AEST.
The report is expected to show the economy added more than 40,000 jobs in May, with the unemployment rate forecast to ease slightly to 4.4%.
“In our view, markets are transitioning from narrow to broader leadership, from suppressed to more normalised volatility, and from momentum-driven gains to a more balanced environment,” Edward Jones senior global investment strategist Angelo Kourkafas said.
“This likely implies some near-term choppiness.
“However, with the economy remaining resilient and earnings growth still robust, we believe pullbacks should be viewed as corrective rather than trend-ending.”
ASX snaps 4-day losing streak
The Australian share market ended higher yesterday, snapping a 4-day losing streak as investors assessed a mixed inflation print and rotated into technology and defensive healthcare stocks.
The S&P/ASX 200 Index rose 21.4 points, or 0.2%, to 8,808.40, with 8 of the 11 sectors finishing in positive territory.
The gains came despite uncertainty around the Reserve Bank of Australia’s next move, after headline inflation for May cooled to 4%, while the RBA’s preferred measure rose more than expected to 3.6%.
Markets were also awaiting a speech from RBA deputy governor Andrew Hauser, along with today’s jobs report, for further clues on the interest rate outlook.
The Australian dollar fell to an 11-week low of US68.99 cents before paring losses to US69.15 cents, as renewed US rate rise expectations supported the greenback.
“Inflation is still high, and its impacts are a lot more broad-based,” UBS Global Markets executive director Rob Taubman said.
“The ASX is definitely moving to a more conservative, more defensive setting … as the market takes a wait-and-see approach.”
Technology was the strongest sector, rebounding from heavy selling in the previous session.
Xero climbed 8.2% to $70.31 after Citi said the software company’s UK price increases pointed to confidence in its market position.
WiseTech Global surged 14.3% to $32.86 as traders bought the dip following a fall of more than 20% over the previous 2 sessions.
Healthcare also attracted renewed buying, with CSL gaining 2.6% to $114.99, taking its gains over the past month to almost 20%. Pro Medicus, ResMed and Ramsay Health Care all rose by around 3.5%.
“There is a switch towards more defensive stocks with renewed interest in health, which have been heavily sold. We’re seeing investors revisit the likes of CSL and Cochlear,” Taubman said.
Energy was the weakest sector as Brent crude fell, with Woodside Energy down 1.4% to $28.24 and Beach Energy sliding 8.5% to 86 cents.
Materials also softened as gold fell, with Ora Banda Mining down 5.3% to $1.16, Newmont off 2.2% to $138.60 and BHP easing 0.7% to $59.50.
Wall Street mixed as tech selling persists
US stocks finished mixed after a volatile session, with the Dow Jones Industrial Average rising 0.4%, while the S&P 500 slipped 0.1% and the Nasdaq Composite fell 0.4%.
Selling pressure returned to technology names as investors continued to question elevated AI valuations and heavy capital spending across the sector.
Attention then turned to Micron Technology, which reported stronger-than-expected results after the closing bell, helping futures recover from earlier weakness.
The result added to hopes that demand linked to artificial intelligence infrastructure remains robust, even as broader market leadership becomes less concentrated.
The VIX volatility index eased 0.86 points to 18.63.
European stocks edge higher as gold slides
European markets were subdued, with London’s FTSE 100 adding 32 points to 10,461.
The move came as gold suffered a sharp fall, dropping almost 3% to hover near US$4,000 an ounce, while oil prices also declined.
IG chief market analyst Chris Beauchamp said gold was experiencing its largest pullback in 4 years.
“The parabolic move of late 2024, through 2025 and on into 2026 has firmly come unstuck. The bigger the party, the bigger the hangover, and gold is still working off its own exuberance,” Beauchamp said.
“2022’s selloff took longer, but we have to go back to the distant days of 2013 to find a bigger percentage loss. As the dollar keeps strengthening, there is more pain to come for gold.”
Currencies
The Australian dollar was 0.2% lower at US69.01 cents near 5.10pm in New York, after earlier touching an 11-week low.
The stronger US dollar also weighed on commodities, while Bitcoin fell 2.8% to US$60,686 after briefly trading below US$60,000.
Bond yields eased, with the US 10-year Treasury yield at 4.39% and Australia’s 10-year yield at 4.76%.
Commodities
Commodities were broadly weaker, led by a sharp fall in oil.
- Brent crude dropped 5.1% to US$73.16 a barrel, while WTI crude fell below US$70 a barrel for the first time since March.
The move followed easing geopolitical tensions and increased maritime traffic through the Strait of Hormuz, which helped reduce supply concerns.
- Gold fell 2.9% to US$3,998.88 an ounce, extending a sharp pullback as the US dollar strengthened.
- Iron ore was a brighter spot, rising 1.3% to US$98.65 a tonne.