United States
Wall Street extended its remarkable run overnight, shrugging off concerns about lofty valuations as optimism over artificial intelligence powered another wave of gains. The S&P 500 notched its 28th record high of the year, rising 0.4%, while the Nasdaq advanced 0.7% and the Dow Jones inched up 0.1%. Nvidia led the charge, climbing nearly 4% after pledging to invest up to $100 billion in OpenAI. The funds will go towards building data centres capable of handling 10 gigawatts of power, leveraging Nvidia’s advanced AI chips.
Apple also surged 4.3%, extending its month-long rally to almost 12%, as its market capitalisation edged closer to $4 trillion. Together, the two tech titans accounted for much of the momentum, underscoring the market’s dependence on mega-cap technology names. Traders described the rally as one that investors should be “responsibly bullish” about, recognising both the opportunity and the risks in chasing such momentum.
In fixed income, bond markets were relatively quiet. Treasury yields ticked slightly higher, with the 10-year yield at 4.15%, the 2-year at 3.60% and the 30-year at 4.77%. Investors are positioning ahead of Friday’s release of the Fed’s preferred inflation gauge, the core personal consumption expenditures (PCE) index. Forecasts suggest a 0.2% monthly rise in August, easing from 0.3% in July, with the annual rate holding steady at 2.9%.
Federal Reserve commentary remained mixed. Governor Stephen Miran argued that monetary policy is too tight and called for aggressive rate cuts, while St. Louis Fed President Alberto Musalem stressed limited scope for easing given stubborn inflation. Cleveland Fed chief Beth Hammack echoed caution, warning against overheating the economy. Markets continue to weigh the balance between rate cuts and sticky inflation, with strategists noting that earnings growth could surprise on the upside if the administration pursues pro-growth fiscal policy alongside monetary easing.
Beyond tech, corporate headlines were plentiful. Pfizer announced a $4.9 billion takeover of obesity drug developer Metsera, seeking to catch up in the weight-loss treatment race. Oracle reshuffled its leadership team as it prepares to oversee a US version of TikTok’s algorithm under an emerging deal. CVS Health’s Omnicare filed for bankruptcy after a $949 million penalty, while Compass moved to acquire Anywhere Real Estate in a $10 billion tie-up that would form the largest US brokerage. Meanwhile, Walmart expanded into refrigerated prescription deliveries, Exxon pressed ahead with a new oil project in Guyana, and T-Mobile named Srini Gopalan as its new chief executive.
Europe
European equities were subdued, with the Stoxx 600 closing flat as investors searched for fresh drivers. Porsche fell 7.2% and parent Volkswagen slid 7.1% after warning of a €1.8 billion profit hit, dragging the auto sector 2% lower. The disappointing outlook highlighted ongoing pressures in Europe’s car industry, already grappling with the high costs of electric vehicle transitions.
Losses were offset by gains in miners, utilities and technology, leaving the broader market little changed. Food, beverage and telecom names also underperformed. Strategists pointed to a lack of catalysts in the short term, with markets likely to follow the “path of least resistance” until more clarity emerges from upcoming economic data.
JPMorgan struck a more constructive tone, highlighting that share buybacks and improving earnings expectations could provide support into 2025. Still, the broader index remains stuck below its March peak as investors juggle hopes for looser US monetary policy with concerns about Europe’s slowing growth. Individual movers included Dutch firm Fugro, which dropped more than 9% after withdrawing its annual guidance.
Australia
Australian equities are set to open firmer, with futures pointing to a 19-point or 0.2% lift in the S&P/ASX 200. The positive lead comes after Wall Street’s fresh records, powered by Nvidia and Apple.
Locally, miners again provided much of the momentum in Monday’s trade. The ASX 200 added 0.4% to close at 8,810.90, with resource stocks advancing on higher commodity prices. Rio Tinto gained 2.6% and Fortescue rose 3.1% as iron ore held above $US106 a tonne. BHP added 1%, though reports surfaced that China’s state-run trader had told steel mills to temporarily halt the use of one of its products amid contract negotiations.
Gold stocks resumed their strong run, with Regis Resources jumping nearly 9% and Evolution Mining climbing more than 6%. Newmont rose 4.7% after completing a $666 million divestment, while Northern Star and Perseus also posted healthy gains. Uranium names joined the rally, with Boss Energy up 6.8% and Paladin climbing 4.7% after fresh signs of physical uranium trading boosted sentiment.
The broader market also saw notable corporate action. Plumbing supplier Reece soared 14.2% after announcing a $250 million share buyback, while biotech firm Starpharma surged 73% on a licensing deal with Roche’s Genentech. Conversely, Viva Energy slumped 8% following the abrupt resignation of its convenience retail chief executive.
Looking ahead, today’s local session will be shaped by offshore cues as investors digest global PMI releases due across the US, Europe and Asia. The combination of strong Wall Street gains and buoyant commodity prices sets the stage for a positive open.
Commodities and currencies
Commodities extended their rally, with gold climbing 1.7% to a record $US3,747.97 an ounce as investors sought a hedge against uncertainty. Brent crude was little changed at $US66.59 a barrel, while iron ore edged higher to $US106.60 a tonne. The broad-based strength across resources has underpinned local miners and reinforced Australia’s leverage to global growth trends.
In currencies, the US dollar retreated, halting a three-day streak of gains. The euro rose 0.5% to $1.1799, the pound added 0.3% to $1.3516, and the yen firmed modestly to 147.74 per dollar. The Australian dollar edged 0.1% higher to US65.99¢.
Crypto markets buckled under pressure, with Bitcoin tumbling 2.8% to $US112,198 and Ether sliding 7.6% to $US4,137. The retreat contrasted sharply with the exuberance in equities, highlighting ongoing volatility in the sector.
Economic Calendar
EU:
- HCOB Eurozone Manufacturing PMI Sep 18:00
- HCOB Eurozone Services PMI Sep 18:00
- HCOB Eurozone Composite PMI Sep 18:00
US:
- Current Account Balance 2Q 22:30
- S&P Global US Manufacturing PMI Sep 23:45
- S&P Global US Services PMI Sep 23:45
- S&P Global US Composite PMI Sep 23:45
This article was written by James Woods, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
