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The Australian sharemarket is set to open 0.5 per cent lower, while Wall Street gained after a US inflation report showed prices rose less than economists expected in August.
The Australian sharemarket is set to fall at the open, with futures at 4.51am AEST pointing to a loss of 41 points, or 0.5 per cent.
US Stocks Gain on Inflation Data
The ASX added 0.9 per cent in the previous session. On Wall Street, stocks gained ground after an update showed US inflation was not as bad as economists expected in August. The S and P 500 rose 0.4 per cent and is close to finishing September with a small gain instead of a loss. The Dow Jones Industrial Average was down 137 points, or 0.3 per cent, in mid-afternoon trade, while the Nasdaq composite was 0.9 per cent higher.
The inflation report said US consumers paid prices that were 3.4 per cent higher overall in August for the cost of living than a year earlier. That was not as bad as the 3.7 per cent economists expected, even if it remained worse than the Fed 2 per cent target. The report followed others earlier in the month about August inflation, but this is the one the Federal Reserve prefers to use.
Traders pared bets that the Federal Reserve will raise its main interest rate next month to get inflation further under control. They now see just a 39 per cent chance of that, down from the coin flip chance seen a day earlier, according to data from CME Group. Wall Street still faces pressure from the bond market. The 10-year Treasury yield rose to 5.30 per cent from 5.26 per cent late Tuesday.
Bond Yields Rise to Highest Levels
It is the centrepiece of the bond market and yields on Tuesday touched their highest level since 2002. The 30-year Treasury yield, which takes into account expectations for inflation and economic growth many years down the line, rose to 5.64 per cent from 5.59 per cent late Tuesday. Higher yields slow the overall economy by making borrowing money more expensive for everyone, while undercutting prices for all kinds of investments.
To be sure, worries about high inflation are just one of the reasons yields have jumped in the United States and around the world. The seemingly solid US economy, which continues to chug along despite its many challenges, is also supporting yields. A report on Wednesday said its growth was even stronger during the spring than earlier estimated. A separate report said growth in business activity in the Midwest was better than economists expected.
Other factors sending yields higher are also continuing to churn, including worries about the big debt loads that Washington and other governments worldwide are supporting. The bond market also felt upward pressure from another climb for oil prices, which have been swinging on uncertainty about when the war with Iran will allow the flow of crude to be fully restored. Brent crude, the international standard, rose 2.2 per cent to 98.26 dollars per barrel.
Hewlett Packard And Nvidia Lead Gains
On Wall Street, Hewlett Packard Enterprise helped drive the market higher after rising 5.5 per cent. It increased its forecast for revenue from its networking business, which is benefiting from the boom in artificial-intelligence technology. Another AI winner, Nvidia, was one of the strongest forces lifting the S and P 500 after adding 1.4 per cent. It has come under pressure, along with the broad industry, on worries that its stock price shot too high.
High interest rates pack a particularly hard punch on stocks seen as the most expensive. Nvidia also benefits from lower yields because they make it cheaper for customers to borrow money to build AI data centres. MongoDB climbed 4.8 per cent after saying its board boosted the database company program to send cash to shareholders through buybacks of its own stock by 1 billion US dollars, or 1.44 billion Australian dollars.
MongoDB Recovery Offsets Cal-Maine Drop
That helped MongoDB recover some of its sharp loss from earlier in the week, after it said Chirantan CJ Desai was stepping down as CEO for a senior role at Meta Platforms. Such gains helped offset a 2.6 per cent drop for Cal-Maine Foods after the country largest egg company reported a larger loss for the latest quarter than analysts expected.
With plenty of eggs available in the market, Cal-Maine Foods saw a sharp drop in prices it could charge, compared with a year earlier. In stock markets abroad, indexes dipped in Europe following a mixed finish in Asia. Japan Nikkei 225 jumped 1.9 per cent, while France CAC 40 fell 0.9 per cent for two of the world bigger moves.
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theage:ASX set to slide, Wall Street higher after inflation update 
brisbanetimes:ASX set to slide, Wall Street higher after inflation updateThis story was compiled and edited by the HeadTopics newsroom and HT AI from the reports above.
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