Wall Street experienced a modest recovery after recent losses driven by strong economic reports. Meanwhile, the Australian market is poised for a decline following a slight gain.
The Australian share market is set to drop on Thursday morning following meagre gains on Wall Street overnight, with futures pointing to a 0.37 per cent fall – or 31 points – at the open. This comes after the Australian market gained 0.8 per cent on Wednesday when positive inflation data left investors hopeful for a sooner-than-expected interest rate cuts.
In the US overnight, Wall Street held firmer, a day after strong reports on the economy hurt stocks by stirring up worries that inflation and interest rates may remain higher than expected. The S&P 500 rose 0.2 per cent to recover a bit of its 1.1 per cent slump from the day before. The Dow Jones Industrial Average added 106 points, or 0.3 per cent, and the Nasdaq composite edged down by 0.1 per cent. In the bond market, which has been the bigger focus for Wall Street recently, the moves were also more modest following the last month’s charge higher for yields. Higher yields hurt stocks by making it more expensive for companies and households to borrow and by pulling some investors toward bonds and away from stocks. The increased calm returned to the market after reports on the economy on Wednesday weren’t as strong as Tuesday’s reports. That can counter-intuitively help Wall Street because it raises hopes that the Federal Reserve may keep cutting short-term interest rates. Wall Street loves lower rates, which can speed up the economy and boost prices for investments. Federal Reserve governor Christopher Waller said in a speech on Wednesday he still expects the central bank to deliver more easing of rates in 2025, pushing back against nascent speculation it may already be done after cutting three times since September. Waller said he didn’t expect tariffs that were possibly coming under President-elect Donald Trump to have a “significant or persistent effect” on inflation. And even though inflation has shown stubbornness recently, Waller still sees it trending downward over the long term
STOCK MARKET WALL STREET INTEREST RATES INFLATION ECONOMY
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