**ASX Set to Follow Wall Street’s Lead; Technology Shares Rally, Focus on Federal Reserve and Nvidia**
*Credit: Based on reporting by Sarah Turner, Australian Financial Review*
The Australian sharemarket is on track to open lower, mirroring trends on Wall Street, despite a surge in technology stocks led by AI chipmaker Nvidia. Investors are weighing up the potential timing and scale of future US interest rate cuts amid ongoing signals from the Federal Reserve, with central bank chair Jerome Powell speaking and critical economic data expected in the days ahead.
**Wall Street Recap: Tech Surge Led by Nvidia**
US stock market indices displayed divergent trends during the past session, with the technology-heavy Nasdaq propelling higher thanks to renewed optimism in artificial intelligence and semiconductors.
– The S&P 500 closed at fresh record highs
– The Dow Jones Industrial Average edged lower
– The Nasdaq Composite advanced strongly, driven by gains in Big Tech and Nvidia
Nvidia, often viewed as a bellwether for the technology sector due to its dominance in AI chips, rebounded to gain over 4 percent after two days of losses. Microsoft, Amazon, and Meta also contributed to the upbeat mood among technology traders. The broad-based tech rally helped offset weakness in energy and banking shares.
**Interest Rate Speculation Intensifies After Mixed Signals**
The recent market volatility comes as investors digest new signals about the trajectory of US monetary policy. Federal Reserve chair Jerome Powell’s remarks to Congress were closely watched, as traders search for clues that could indicate when and how aggressively the Fed might lower interest rates.
Key points from Powell’s comments:
– Powell stated that inflation is moving in the right direction, closer to the Federal Reserve’s 2 percent target
– He emphasized that the Fed does not need inflation to hit 2 percent before it begins easing rates
– However, Powell cautioned that more evidence is needed to confirm a sustained decline in price pressures
These mixed messages have kept markets guessing. According to futures trading aggregated by the CME FedWatch tool, the probability of a September rate cut hovers at around 72 percent. Bond yields retreated, helping support equity valuations, particularly in the growth sector.
**ASX Futures Signal Cautious Drop**
ASX SPI200 futures pointed to a modestly negative start for the Australian equity market. The local bourse is expected to follow overnight leads, with pressure likely to appear in cyclical sectors such as resources and banking, even as technology may try to mirror the Nasdaq’s momentum.
– ASX 200 futures fell 19 points or 0.2 percent before the market open
– The previous ASX session ended at 7,737.7, with soft commodity prices weighing on resource-heavy stocks
**Australian Dollar and Key Commodity Movements**
The Australian dollar experienced modest gains, trading up a touch at 67.42 US cents as global risk appetites improved and the US dollar softened after the release of Powell’s testimony.
Commodity prices saw
Read more on AUD/USD trading.