ASX futures are down 34 points, or 0.5%, as of 9am Wednesday, suggesting that the benchmark index will add to Tuesday's 0.1% decline when trading begins.
Australian inflation data for April is due for release during Wednesday's session, and RBA governor Philip Lowe is addressing a Senate Estimates hearing, potentially giving investors clues about the likely path for local interest rates.
Wall Street
The blue-chip Dow Jones Industrial Average gave up about 0.1%, the broad-based S&P 500 inched up less than 0.1%, and the Nasdaq Composite rose 0.3% on continued enthusiasm for companies involved with artificial intelligence.
Commodities & Bonds
Brent crude oil fell 1% to $76.37 a barrel while WTI declined 0.7% to $72.13 a barrel. Gold rose to US$1,959.42.
The 2 Year Australian Government Bond yield is 3.54% and the 10 Year yield is 3.63%.
The yield on the benchmark US 10-year Treasury note reversed course after climbing into the weekend. It ended Tuesday at 3.697%, down from 3.820%. The yield on one-month Treasury bills dropped to 5.224%, from 5.496% before the debt deal.
One Australian dollar is buying 65.19 US cents.
Asia
China: Chinese shares reversed early losses to end higher, led by AI stocks. Zhao Zhiguo, Chief Engineer at the Ministry of Industry and Information Technology, said China plans to use brain-computer interfaces to develop industries. Gains included Kingsoft Office Software (+5.6%), China Telecom (+3.3%), and HIK Vision (+3.4%). Decliners included Kweichow Moutai (-1.2%) and Bank of China (-1.3%). The Shanghai Composite rose 0.1% to 3224.21.
Hong Kong: The Hang Seng Index ended 0.2% higher at 18595.78. BYD rose 2.2%, Baidu 3.3%, and Tencent 1.0%. Energy stocks declined.
Japan: The Nikkei rose 0.3% to 31328.16, its highest since July 1990. The Topix fell 0.1% to 2159.22. The 10-year JGB yield dropped to 0.430%.
India: The Sensex closed 0.2% higher at 62969.13. Gainers included ITC (+2.3%), Bajaj Finserv (+1.1%), and Kotak Mahindra (+1.1%). Tech Mahindra fell 1.3%.
Europe
European stocks fell amid debt ceiling uncertainty. The Stoxx Europe 600 dropped 0.8%, the FTSE 100 fell 1.2%, the DAX slipped 0.1%, and the CAC 40 lost 1.2%. According to AJ Bell’s Russ Mould, market unease remains until Congress signs off on the US deal.
North America
Tech stocks climbed and Treasury yields declined as markets reacted to the tentative US debt ceiling deal. The Nasdaq rose 0.3%, the S&P 500 edged up, and the Dow fell 0.1%. Nvidia surged 3%, briefly reaching a $1 trillion market cap. Intel and Qualcomm rose 3.4% and 5.1% respectively. Netflix and Tesla gained over 3% each.
“Tech is trading like safety stocks because you had a bank crisis,” said Glenmede’s Alex Atanasiu, warning of excessive market concentration. Phil Blancato of Ladenburg Thalmann added that caution is warranted: “Cash is your friend right now, and dividend stocks.”
Energy shares were the weakest performers again as fuel prices declined.
