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Markets live: ASX to open higher, AI stock rally drives Nasdaq to record high, oil drops below $US100
The Australian share market is likely to start the day higher after Wall Street's AI stocks surged, pushing the tech-heavy Nasdaq index to a new record high.
Oil prices fell to their lowest level since early September on investors' renewed hopes for a diplomatic breakthrough to end the US-Iran war.
See how the trading day unfolds on our blog.
Disclaimer: this blog is not intended as investment advice.
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Market snapshot
- ASX futures: +0.3% at 8,809 points
- ASX 200 (Monday): flat at 8,732 points
- Australian dollar: +0.1% to 71.2 US cents
- Wall Street: Dow Jones (+0.7%), S&P 500 (+1.5%), Nasdaq Composite (+2.3%)
- Europe: Stoxx 600 (+1%), DAX (+1.1%), FTSE (+0.8%)
- Spot gold: -0.9% at $US4,340/ounce
- Oil: Brent futures -3.9% to $US99.86/barrel, WTI futures -4.9% to $US95.43/barrel
- Iron ore: +0.3% to $US97.50/tonne
- Bitcoin: -0.5% to $US86,554
Prices current at around 8am AEST
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Nasdaq hits new record high as AI optimism abounds and Treasury yields retreat
On Wall Street, the Nasdaq Composite surged to a record-high close on this morning, lifted by gains in Advanced Micro Devices and other AI heavyweights.
The Nasdaq notched its first record-high close since June 2, while the S&P 500 is almost back at the record close it reached on August 13.
Investors pointed to signs that suggest spending on AI is still expanding, despite recent safety warnings from leaders of AI giants a week ago that triggered a global tech sell-off.
To give you an idea of how well US markets performed:
- The Nasdaq gained 2.3% to 27,122 points
- The Dow Jones Industrial Average rose 0.7% to 52,045 points, while the S&P 500 climbed 1.5% to end the session at 7,765 points.
- Chip stocks rallied with Intel surging 12.2%, Arm Holdings up 17%, and the PHLX semiconductor index jumping 4.3%.
- Advanced Micro Devices rose about 10% to reach a market capitalisation of $US1 trillion for the first time.
- Meta shares soared 11.4% after Wells Fargo hiked its price target on the social media platform following the recent launch of its Muse AI assistant.
Interest rates and Iran war on investors' minds
Meanwhile, investors still remain wary of the interest-rate outlook after the US Federal Reserve last week raised rates for the first time in three years to fight inflation.
Traders see a 50% chance of another hike next month, CME's FedWatch showed.
On a related note, the Treasury's 10-year bond yield — which determines the US government's long-term borrowing costs —fell below the psychologically important 5% level.
That was after the price of oil futures fell below $US100 a barrel, its lowest level since September 9.
While Washington and Tehran exchanged threats through the weekend, US President Donald Trump said he would be open to meeting Iranian President Masoud Pezeshkian, who is expected to attend the UN General Assembly in New York this week.
- with Reuters
Key Event
Oil price drops below $US100 on hopes of US-Iran diplomacy
The crude oil price has sunk to its lowest level in 12 days as investors hoped for diplomatic progress on the Iran war due to this week's United Nations meeting and eyed a partial recovery in shipments from Saudi Arabia.
Brent crude futures fell almost 4% to $USUS99.86 per barrel.
WTI crude futures dropped 5% to $US95.43 per barrel.
Both benchmarks fell to their lowest since September 9.
On Sunday, Iran and the US exchanged new threats, although US President Donald Trump said he would be open to meeting Iranian President Masoud Pezeshkian, who is expected to be in New York this week for the UN General Assembly.
Iran has conveyed its conditions to mediators for re-engaging in negotiations, Al Jazeera reported, citing Iran's security chief, Mohsen Rezaei.
Partial recovery in Saudi exports
Fighting in the Middle East continued as Yemen's Iran-backed Houthis said they had attacked Riyadh as well as a Saudi Aramco facility in the Red Sea city of Yanbu, while pushing to cut off the Red Sea coast from remaining areas held by Saudi-backed forces.
China has asked Iran to help rein in the Houthis after an appeal to Beijing by Saudi Arabia following the attacks, according to three Iranian sources familiar with the matter.
The attacks by the Houthis on Aramco's East-West pipeline have prompted the firm to increase exports through the Strait of Hormuz this month and next after halting some shipments via Yanbu.
Expectations of a partial recovery in shipments from Saudi Arabia further weighed on prices.
- with Reuters
Key Event
ASX to open higher as global optimism returns
Welcome to the ABC's finance blog! I'll be guiding you through the latest market action for the next few hours.
It appears the Australian share market is on track to open slightly higher this morning.
ASX futures, which are a rough indicator of how the market may open, have risen by 0.3%.
It will follow a strong lead from Wall Street as AI-related stocks surged, oil prices fell sharply and US Treasury bond yields slipped.
The Australian dollar has edged up slightly to 72.2 US cents.
In the meantime, grab a coffee, tea (or whatever you drink) and I'll be back with more updates soon!
