Overnight Market Summary

Major US indices finished higher but closed off their best levels. The S&P 500 (+0.48%) and Nasdaq (+0.94%) reached fresh record highs, while the Dow rose 0.27%. Small caps outperformed, with the Russell 2000 surging 2.5% to its first record high since November 2021. Cyclicals and growth stocks gained traction as markets positioned for continued Fed easing.

In corporate news, Nvidia rose 3.4% after announcing a $5bn investment in Intel, sending Intel shares 22% higher. Other notable movers included Apple, which rebounded on optimism over higher iPhone prices, and Meta, which launched its AI-powered smart glasses.

Global Equities

Europe and Asia were mixed. Germany (+1.35%) and Japan (+1.15%) posted solid gains, while Hong Kong (-1.35%) and China (-1.15%) fell on renewed growth concerns. India (+0.39%) and Canada (+0.45%) were modestly higher, while the UK edged up 0.21%.

Commodities Update

Commodities weakened overnight. Gold slipped 0.47% to US$3,642/oz as bond yields climbed, reducing demand for defensive assets. Copper fell 0.56% to US$4.54/lb on concerns about slowing Chinese demand. Oil declined 0.77% to US$63.64/bbl amid higher US inventories and expectations of steady OPEC output.

Currencies & Bonds

The AUD/USD held steady at 0.6613. US 10-year Treasury yields rose to 4.10% as markets adjusted to Powell’s cautious outlook, while the VIX remained subdued at 15.7.

US Sector Performance

Technology led gains (+1.36%) with semiconductors and AI-linked names driving strength. Industrials (+1.06%) and Communication Services (+0.28%) also advanced. Defensive sectors lagged, with Staples (-1.03%) and Energy (-0.43%) under pressure.

Industry Themes

Uranium (+2.6%) and clean energy ETFs rallied, supported by rising demand for renewables. Semiconductor ETFs gained 3.5% on strong chipmaker performance. Hydrogen surged 4.6%, while cybersecurity and robotics also posted gains.

Central Banks & Macro

The Fed’s first rate cut since December 2024 has lifted expectations for more easing in October. Bond yields rose as Powell cautioned that inflation risks remain. The Bank of England held at 4%, while Norway cut rates. In Asia, the BOJ remained on hold, while China maintained its 7-day repo rate.

On the data front, New Zealand GDP contracted more than expected, reinforcing expectations of a rate cut. Australia’s jobless rate held steady despite weaker employment, supporting expectations that the RBA will remain on hold in September.

ASX 200 Outlook

ASX 200 futures are up 41 points (+0.46%), indicating a positive open. The rally in US equities, particularly small caps and semiconductors, is expected to support Australian tech and growth names. However, weaker commodities, especially gold and oil, could weigh on resources stocks. Overall, the index is expected to trade higher today, driven by risk-on sentiment and optimism around global rate cuts.

ASX Corporate Highlights

• NextEd Chair Sandra Hook purchased 238,000 shares, signaling confidence in the company.
• Perseus Mining secured approval for underground development at Yaouré, with first ore due Jan 2026.
• Tabcorp reached a multimillion-dollar settlement with former CEO Adam Rytenskild to avoid further litigation.

Key Events

Several companies go ex-dividend today including Latitude Group Holdings, Vita Life Sciences, and Wam Income Maximiser. Dividends are also being paid by ASX, Tabcorp, Resimac, Yancoal, Pinnacle, and others.

Summary

Global equities remain buoyant with US indices at record highs, driven by Fed easing expectations and strong tech performance. Commodities softened due to higher yields and weaker demand signals. Locally, the ASX 200 is set for a firmer start, with gains likely led by tech and small caps, while resources could underperform. Focus today will be on small-cap momentum and corporate updates.

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