**ASX Poised to Climb as US Bonds Rally and Alphabet Fuels Tech Surge**
*Adapted and expanded from an article by Sarah Turner, Australian Financial Review.*
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The Australian sharemarket is set for a positive opening, buoyed by robust gains on Wall Street. Major US indices climbed as bond yields fell, reflecting easing inflation concerns among investors. Technology stocks led the rally, with Alphabet, Google’s parent company, surging after reporting impressive results. Investors are now laser-focused on upcoming economic data that could influence the trajectory of global interest rates.
## Wall Street’s Resurgence Lifts Australian Outlook
Overnight, US stocks rebounded sharply after a period of market volatility. The S&P 500 gained more than 1.2 percent, the tech-heavy Nasdaq Composite soared over 2 percent, and the Dow Jones Industrial Average advanced 1.5 percent. The renewed optimism spilled into equity markets globally, signaling a stronger open for the Australian Securities Exchange (ASX).
### Key Drivers Behind the US Market Rally:
– **Bond Yields Retreat:** US Treasury yields declined, with the benchmark 10-year yield falling to its lowest level in several weeks. This reversal reflected investor sentiment that inflationary pressures may be cooling, reducing the urgency for further rate hikes from the Federal Reserve.
– **Alphabet Earnings Beat Expectations:** Alphabet reported quarterly earnings that exceeded analyst forecasts, driving its share price up by over 10 percent in after-hours trading.
– **Tech Sector Strength:** The broader technology sector benefited from Alphabet’s strong performance, with FAANG stocks (Meta, Apple, Amazon, Netflix, Google) gaining momentum.
– **Optimism Ahead of Economic Data:** Investors remain hopeful that upcoming data will reinforce a narrative of moderating inflation, which would support continued growth in equity markets.
## Asian and Australian Equities: Anticipated Movements
In response to Wall Street’s surge, ASX futures pointed to a notable rise at the market open. Most sectors are expected to benefit, particularly those sensitive to US and global economic conditions.
### Expected Sector Performance on ASX:
– **Technology:** Likely to mirror the gains seen in US tech stocks, especially after Alphabet’s results.
– **Resources and Mining:** With commodity prices stabilizing and China’s economic data showing modest improvements, mining giants like BHP and Rio Tinto could see some support.
– **Financials:** Banks may also edge higher, benefitting from a more positive macroeconomic backdrop.
## Global Bond Market Rebound Eases Fears
A critical factor behind the renewed stock market momentum has been the stabilization and reversal in global bond markets. For much of the year, concerns about persistent inflation caused bond yields to rise, pressuring equity valuations, particularly in rate-sensitive sectors such as technology and real estate.
### What is Driving the Bond Market Reversal?
– **Cooling Inflation Data:** Recent US economic reports have shown signs of moderating price pressures in goods, services, and wage growth.
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