ASX Poised for Steady Start as Fed Maintains Interest Rates
The Australian sharemarket is bracing for a steady start as the ASX is expected to record a slight dip of 5 points at opening. This forecast follows the broader US stock market navigating its all-time highs and the Federal Reserve maintaining interest rates. Investors are keenly awaiting comments from Federal Reserve Chief Jerome Powell, whose press conference is scheduled for 6:30 AM AEDT.
US Market Overview
The S&P 500 remains largely unchanged after reaching a new record. The Dow Jones rose by 58 points, equating to 0.1%, while the Nasdaq composite slightly increased by the same margin. The stability of the US dollar has been noted after falling to its lowest level in nearly four years.
Influential Companies
- ASML, a Dutch company, reported an optimistic revenue forecast for 2026, boosting market morale.
- Nvidia, prominent in the AI sector, gained 1.4%, substantially uplifting the S&P 500.
- Seagate Technology surged 19.3% after exceeding profit expectations, largely attributed to its AI applications.
- Starbucks’ revenue topped analysts’ forecasts, helping its stock gain 2.1% despite a dip in profits.
Market Reactions
Despite some positive outcomes, other companies faced challenges. For instance, Elevance Health shares rose 5.8% after posting stronger-than-expected profits, recovering from a previous downturn. However, Amphenol’s stock fell by 12.2%, despite reporting better-than-predicted growth.
Currency and Bond Market Insights
The US dollar has shown signs of stabilization, gaining against various currencies after experiencing a significant drop. Recent political instability has contributed to concerns about the dollar, leading to increased investments in gold and other metals. Notably, gold prices surpassed $5,000 per ounce this week, now sitting at $5,292.40.
Treasury Yields
In the bond market, the yield on the 10-year Treasury rose slightly to 4.26% from 4.24%. The Federal Reserve’s previous rate cuts aimed to support the job market, though inflation persists above the target of 2%.
Global Market Performance
International market trends reflect mixed reactions. While European indexes declined, Asian markets exhibited strong performance. South Korea’s Kospi gained 1.7%, with a notable rise of 5.1% from chip maker SK Hynix. Hong Kong’s Hang Seng also reported a 2.6% increase.
As Wall Street and global markets pulse with these developments, the ASX remains poised for a steady but cautious opening. Investors will continue to watch for signals from key economic players to inform their strategies moving forward.
