The ASX is set to open lower, after a fall on Wall Street brought the S&P 500 10 per cent below its July peak, putting the benchmark index into a correction.
The Australian sharemarket is set to open lower, with futures pointing to a 1 per cent drop in the ASX 200, after a fall on Wall Street and amid worries about the risk of escalating conflict in the Middle East.
Stocks have fallen the past three months as investors face the reality of higher interest rates, with Federal Reserve officials talking about keeping rates “higher for longer” and the yield on the 10-year Treasury reaching levels not seen since 2007. Analysts say investors are also concerned near-term about an escalation of tensions in the Middle East and the strength of company earnings.
Amazon rose 6.8 per cent following its profit report. Both its profit and revenue for the summer were better than expected. As one of the most massive companies on Wall Street, Amazon’s stock movements carry huge weight on the S&P 500 and other indexes. Several big companies slipped after reporting disappointing earnings for their latest quarters. Exxon Mobil fell 1.9% after reporting a bigger drop in profits than Wall Street expected. Chevron fell 6.7 per cent after also falling short of analysts’ profit forecasts.
“This market has been looking at every single component of what companies are saying,” Krosby said. “You could see this is a market that is very careful about rewarding companies.” A separate report said that U.S. consumers’ expectations for inflation in the coming year are rising, up to 4.2 per cent from 3.2 per cent last month. That’s particularly concerning for the Fed, which fears such expectations could lead to a vicious cycle that worsens high inflation.
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