Market Open: AI rally lifts Wall Street, but Australia’s rate test looms

ASX today – The ASX is set for a modestly firmer open today, with futures pointing to a gain of around 0.2–0.3%, after a mixed session on Wall Street that nevertheless delivered another record close for the Nasdaq.

The overnight move was again heavily concentrated in technology. The Nasdaq gained 0.45%, while the S&P 500 was broadly flat and the Dow slipped 0.36%.

Semiconductor stocks continued to lead the rally, with AMD pushing above a US$1 trillion market value and investors continuing to chase companies positioned to benefit from AI infrastructure spending.

That gives local technology stocks a positive lead into Wednesday, although the broader US market was considerably less convincing than the Nasdaq headline suggests.

The bigger question for Australian investors remains interest rates.

RBA Governor Michele Bullock used her final public appearance before next week’s policy meeting to again highlight upside risks to inflation, including excess demand and a labour market that remains relatively tight. Markets and all four major Australian banks are now expecting the RBA to raise rates at its September 28–29 meeting.

That makes Thursday’s employment report an important next test. A stronger-than-expected labour market could reinforce the case for tighter policy, while today’s trading is likely to continue reflecting how investors reposition ahead of the data.

There is also a notable twist to the AI story.

While investors continue to reward the global AI trade, Bullock said the investment boom is currently adding to demand before the productivity benefits of AI have become evident on the supply side of the economy. She also acknowledged that central banks are watching the risk that AI valuations could get ahead of underlying earnings potential.

Oil provides another moving part this morning. Brent continues to slide as markets respond to signs of possible progress in US-Iran negotiations. Lower oil prices could ease some inflation pressure, but they may weigh on Australian energy stocks.

What to watch

For the ASX today, watch whether the positive tech lead broadens beyond the usual AI names, how banks respond to the higher-rate outlook, and whether resources can hold up with gold and copper providing some support.

The immediate setup is therefore fairly simple: Wall Street has provided a positive lead, but Australian investors have the RBA and Thursday’s jobs data sitting firmly in the background.

Local market news

KMD Brands (ASX: KMD) has achieved a 6.5% YOY growth in total sales;

Basin Energy (ASX: BSN) has identified multiple near-term catalysts at Newmans;

Cosmo Metals (ASX: CMO) has awarded a contract for drilling at the Mona prospect;

Critica (ASX CRI) has advanced offtake discussions through the distribution of Jupiter MREO product samples; and

Capricorn Metals (ASX: CMM) has completed the Karlawinda expansion project on schedule.

Buck and ore

Now – in forex, the Oz dollar is buying US$0.711

Looking at commodities, all in the greenback,

Iron Ore was down 0.19% to $97.32 per tonne in Singapore today,

Brent Crude was down 1.68% to $98.650 per barrel,

Gold was selling at $4364.32

US natgas futures were up 6.42% to $3.0180 per gigajoule.

That’s HotCopper’s Market Open, I’m Colin Sandell-Hay – happy trading.

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