The Australian share market is expected to extend Thursday’s recovery after technology stocks drove a broad Wall Street rally and easing Treasury yields encouraged investors to return to riskier assets.
ASX 200 futures were pointing to a gain of 28 points, or 0.3%, at the open. Higher commodity prices could provide additional support for Australian mining and energy companies, while Bitcoin surged above US$81,000.
ASX snaps three-session decline
The S&P/ASX 200 gained 0.46% on Thursday, ending a three-session losing streak, although trading volumes remained below average.
Eight of the market’s 11 sectors finished higher. Financial stocks led the recovery with a 0.86% gain.
Friday’s positive futures signal suggests the rebound could continue, supported by Wall Street’s gains and stronger prices across oil, precious metals, copper and iron ore.
Technology powers Wall Street rally
US stocks finished firmly higher as gains among major technology and communication services companies outweighed concerns about escalating conflict between the US and Iran.
The Dow Jones Industrial Average rose 1.2% to 53,686.11, the S&P 500 gained 1.1% to 7,747.71 and the Nasdaq Composite advanced 1.4% to 26,584.06.
Microsoft climbed 2.7%, Meta Platforms gained 3% and Apple added 1%.
Nvidia rose 1.8% after agreeing to acquire artificial intelligence platform Hugging Face for US$13 billion, equivalent to about A$18 billion.
Robinhood Markets surged 16.57%, Coinbase Global jumped 10.14% and Palantir Technologies advanced 7.71%, making them the three strongest performers in the S&P 500.
At the other end of the market, Ciena dropped 10.36%, Tyson Foods fell 7.26% and Campbell’s declined 6.96%. Tyson lowered its annual revenue and operating income guidance as volatile cattle prices placed pressure on margins.
Broadcom declined 2.7% despite exceeding quarterly expectations and forecasting that its artificial intelligence chip revenue would double by the end of its 2028 financial year. Its near-term revenue outlook fell short of expectations.
Bond yields ease ahead of jobs report
US Treasury yields declined as investors assessed an increase in weekly unemployment claims and prepared for Friday’s August employment report.
The benchmark 10-year Treasury yield fell to 4.76% from 4.79%, while the policy-sensitive two-year yield declined to 4.33% from 4.39%.
The employment report will be examined for further evidence of a cooling labour market and its implications for the Federal Reserve’s September meeting.
Investors are weighing signs of weaker employment growth against inflationary pressure from elevated energy prices.
European markets advance
European sharemarkets closed higher, with the UK’s FTSE 100 gaining 0.7% to 10,831.52.
Germany’s DAX climbed 0.6% to 26,003.32, while France’s CAC 40 edged 0.1% higher to 8,286.40.
The gains came despite continued concern that rising oil prices could intensify inflation and keep borrowing costs elevated.
Asian markets mixed
Asian markets delivered a mixed performance.
China’s Shanghai Composite was unchanged at 3,942.09, while the Shenzhen Composite gained 0.1% to 2,512.87.
Hong Kong’s Hang Seng Index fell 0.4% to 25,213.31 and Japan’s Nikkei declined 0.2% to 64,214.48. India’s BSE Sensex dropped 0.5% to 76,152.86.
Australian dollar consolidates
The Australian dollar was trading at US72.02 cents, holding close to its recent peak of US72.08 cents following a strong advance.
The currency remains above short-term technical support at US71.95 cents and its 200-period moving average of US71.68 cents.
However, momentum is softening. A bearish MACD crossover, a retreat in the relative strength index to 53.32 and a series of lower highs indicate fading buying pressure.
Bitcoin surges 5%
Bitcoin jumped 5.01% to US$81,183.50 as improving market sentiment encouraged investors to return to cryptocurrency and other risk-sensitive assets.
The rally supported cryptocurrency-linked shares on Wall Street, with Coinbase gaining 10.14% and Robinhood rising 16.57%.
Gold holds firm as commodities rise
- Spot gold was trading at US$4,474.60 per ounce, edging up 0.03% after its recent strong advance.
- Silver gained 2.96% to US$65.05 an ounce, palladium surged 5.05% to US$1,366.50, and platinum climbed 3.48% to US$1,768.30.
- Copper advanced 1% to US$6.512 a pound, while iron ore rose 1.74% to US$97.72 a tonne, delivering a positive lead for Australian resources stocks.
- November Brent crude futures gained 0.3% to US$95.92 a barrel and West Texas Intermediate rose 1.15% to US$90.63.
- Oil remains elevated as renewed military exchanges between the US and Iran increase concerns about global supply and shipping through the Strait of Hormuz.
What to watch
The August US employment report will be the main event for global markets on Friday.
Investors will closely examine job creation, unemployment and wage growth for clues about whether the Federal Reserve will raise interest rates when its policy meeting concludes on September 16.