**ASX Set for a Positive Start After Wall Street Rally Amid Renewed Rate Cut Hopes**
*Original reporting by Tom Richardson, Australian Financial Review (AFR)*
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The Australian sharemarket is preparing to open higher, following a notable rally on Wall Street. The optimism is being fuelled by renewed investor expectations that central banks, particularly the US Federal Reserve, are more likely to cut interest rates later in the year. A combination of encouraging economic data from the United States and signals from the Federal Reserve is underpinning this improved sentiment.
### Wall Street Leads Global Rally
Wall Street’s major indices closed higher in recent sessions, marking a change in mood after months of volatility and uncertainty over the direction of interest rates. The S&P 500 and the Nasdaq both rose notably, buoyed by significant gains in tech and growth-oriented stocks.
#### Key Points from Wall Street:
– The S&P 500 finished the session up 1.7 percent, its most significant one-day increase in over a month.
– The Nasdaq Composite surged by 2.2 percent, continuing its streak as a strong performer in the tech-centric space.
– Blue-chip stocks in the Dow Jones Industrial Average also rose by 1.5 percent, reflecting improving sentiment across sectors.
– Increased trading volumes accompanied these gains, indicating robust investor participation.
Investors have responded to the softer-than-expected US jobs figures and a moderation in inflation, interpreting these as signs that the Federal Reserve could soon pivot away from its restrictive stance.
### Renewed Confidence in Rate Cuts
Optimism in equity markets has largely hinged on the perceived likelihood that central banks, most notably the Fed, will shift towards monetary easing. This speculation follows a series of economic reports suggesting a gradual cooling in inflation and labour markets.
#### Factors Influencing Rate Cut Bets:
– US non-farm payrolls data revealed that jobs growth slowed more than forecast, while wage increases showed signs of easing.
– Consumer price inflation remains below the peaks seen in 2022, with recent monthly figures coming in softer than anticipated.
– Federal Reserve Chair Jerome Powell and other officials have recently adopted a less hawkish tone, noting risks to economic growth if rates remain too high for too long.
Traders are now pricing in that the first US rate cut could come as soon as the third quarter of this year, as reflected in futures markets.
### ASX Poised to Benefit
Australia’s S&P/ASX 200 is expected to track Wall Street’s positive momentum and open higher in the coming session. Futures are pointing to a gain of about 0.8 percent at the start of trade. The broader risk-on sentiment is expected to benefit sectors such as technology, real estate investment trusts (REITs), and consumer discretionary stocks on the local bourse.
#### Sectors to Watch on the ASX:
– **Technology:** Companies with high growth potential often benefit from a lower interest rate environment due to the reduced cost of capital.
– **Financials:**
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