**ASX to Open Higher as Wall Street Rally Shows Signs of Cooling**
*Original Reporting: By Sarah Turner, Australian Financial Review.*
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The Australian sharemarket is poised to edge higher at the open, following a mixed session on Wall Street that saw recent stock market rallies pause amid investor caution. While US indices remain near record highs, the surge seen in previous sessions has begun to wane as global markets digest economic signals and earnings reports. This update will examine the factors tracking the ASX, review Wall Street’s overnight performance, and provide insights from other market sources.
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### Overview
– **ASX futures** indicate a modest gain at the open
– **Wall Street** experienced tepid gains, with the S&P 500 rising only slightly as its recent rally slowed
– Most sectors showed limited movement, reflecting ongoing uncertainty among global investors
– Key factors influencing sentiment include economic data releases, central bank outlooks, and upcoming corporate earnings
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## US Markets Show Resilience, But Momentum Eases
US markets have been at or near all-time highs, driven by enthusiasm for technology stocks and optimism that the Federal Reserve will be able to engineer a soft landing for the US economy without major disruptions to growth or inflation. However, profit taking and a more cautious mood emerged during the latest session.
– **S&P 500 Index:** Closed with a marginal 0.2 percent increase, reflecting hesitance after recent gains
– **Dow Jones Industrial Average:** Added just 0.1 percent
– **Nasdaq Composite:** Rose by 0.3 percent, underpinned by select tech stocks
Sectors such as technology and consumer discretionary provided support, but advances were offset by declines in financial, energy, and healthcare stocks.
#### Key Drivers
– **Interest Rate Outlook:** Investors remain focused on signals from the US Federal Reserve. Recent comments have suggested the US central bank is content to maintain current rates until inflation returns closer to its 2 percent target.
– **Inflation Data:** A series of economic prints, including CPI and PPI, have shown moderation in price gains, helping to boost investor sentiment in previous weeks. However, concern persists that inflation could prove sticky.
– **Earnings Season:** Several large-cap companies are set to report earnings in the coming days, which could provide catalysts for future market moves.
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### Tech Sector and AI Remain in Focus
Enthusiasm for companies investing in artificial intelligence continues to underpin overall market sentiment, even as the broader rally tapers.
– **Nvidia:** Remained a focal point for investors after its recent surge, with analysts divided over whether the stock’s valuation is justified by the anticipated growth in AI spending.
– **Microsoft and Alphabet (Google parent):** Also traded higher, reflecting ongoing demand for cloud and AI-related services.
– **Apple and Amazon:** Saw slight increases, though momentum is less robust than during the initial phases of the AI-driven rally.
#### Recent AI Market Impacts
According
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