**Australian Sharemarket Set to Open Higher as Wall Street Tech Rally Continues**
*Adapted from a report by Stephen Dover, The Australian Financial Review. Supplemented with information from Reuters and Bloomberg.*
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The Australian sharemarket is predicted to start the trading session on a strong note, reflecting the positive momentum seen overnight on Wall Street. Investors were buoyed by a broad-based rally, especially within the technology sector, as global sentiment shifted on hopes that central banks may be nearing the end of their rate hiking cycles. The surge was led by companies like Advanced Micro Devices (AMD), which paced a rally amongst key tech stocks.
**Key Highlights**
– The ASX futures market indicated a confident start for the local market, with expectations of a notable jump at the open.
– US markets closed broadly higher, with the S&P 500 and Nasdaq leading gains.
– Strong performances from technology giants helped power the rally.
– Investors are weighing softer economic data and calmer bond markets, signalling potentially slower interest rate increases ahead.
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**Global Market Backdrop**
Investors across the globe have been closely watching signals from the US Federal Reserve and other central banks, searching for clues about the trajectory of interest rates after a year dominated by inflation and aggressive monetary tightening.
– US economic data released on Thursday showed signs of softening, easing some pressure off the Federal Reserve.
– Treasury yields pulled back after reaching their highest levels in over a decade, making equities more attractive relative to bonds.
– The US Labor Department reported weekly jobless claims that were higher than expected, suggesting the labor market might be cooling. Economists hope this could help moderate inflation further in coming months.
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**Tech Sector Ignites Wall Street Rally**
The biggest impact on Wall Street came from the deep rally in tech stocks. Leading the charge was AMD, which climbed after positive analyst updates suggesting robust demand for its AI chips.
– NVIDIA, another major player benefiting from the AI boom, added substantial gains, propelling the tech-heavy Nasdaq higher.
– Apple, Microsoft, and Meta Platforms also contributed strong advances, as investors remain optimistic about the sector’s long-term growth prospects.
Other sectors, such as consumer discretionary and communication services, followed the tech sector’s lead, moving higher in sympathy.
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**Australian Market Outlook**
The anticipated rise on the ASX reflects the overnight sentiment in global markets, with local investors hopeful that external pressures are beginning to ease. Key factors influencing ASX performance include:
– The ebb and flow of the US tech rally, which often steers market momentum in Australia.
– Commodity prices, which remain relatively stable, providing some support for resource-heavy local indices.
– Updates from the Reserve Bank of Australia, which is watching domestic inflation and wage data to determine its own rate path.
**Key Australian sectors likely to benefit include:**
– Technology, as global confidence returns to high-growth sectors.
– Banks and financials, potentially buoyed by the prospect of stable or falling rates.
– Miners, benefiting from steady or
Read more on AUD/USD trading.