The Australian sharemarket is set to open higher after Wall Street held close to record levels in subdued global trading, while oil prices eased as investors watched uncertainty surrounding the war with Iran.
ASX futures pointed to a rise of 24 points, or 0.3 per cent, at the open. The benchmark added 0.3 per cent on Tuesday, while the Australian dollar was trading at US71.12¢.
In New York, the S&P 500 gained 0.1 per cent and remained 0.4 per cent below the record high set last month. The Nasdaq composite rose 0.4 per cent to another record, while the Dow Jones Industrial Average was down 168 points, or 0.3 per cent, in mid-afternoon trading.
Oil prices initially fell sharply, with Brent crude briefly dropping below US$98 a barrel before recovering some ground. It was last trading at US$99.66, down from almost US$110 last week but still well above the US$72 level recorded before the war with Iran began.
Crude prices have been swinging as markets assess when the conflict will allow oil to flow freely again from the Middle East to customers around the world.
Company profits support US stocks
Corporate results continued to provide support for US equities despite high energy costs and concern that artificial intelligence stocks may have risen too far.
Analysts expect companies in the S&P 500 to report overall third-quarter profit growth of nearly 29 per cent from a year earlier, according to FactSet. If achieved, it would mark the third consecutive quarter of growth above 25 per cent for the index.
AutoZone shares rose 6.1 per cent after the retailer reported stronger-than-expected quarterly profit, although its revenue fell short of forecasts. Chief executive Phil Daniele said the company had faced “a difficult selling environment” during the first two months of the quarter, but that conditions improved afterwards.
Shares in recreational vehicle maker Thor Industries gained 5.1 per cent after it also exceeded profit expectations. Its chief executive, Bob Martin, said expensive fuel, high interest rates and persistent inflation were putting pressure on customers’ budgets, while business “never reached the inflection point many in the industry expected” during the latest financial year.
On Holding jumped 8.8 per cent after the Swiss sportswear company set financial targets for coming years and approved a plan to buy back up to US$1 billion of its shares through 2029.
Energy stocks fell as crude prices declined, with ConocoPhillips down 1.7 per cent. Banks also weakened, extending losses since the Federal Reserve raised its benchmark overnight interest rate last week for the first time in three years.
JPMorgan Chase fell 3.1 per cent and was among the biggest drags on the S&P 500. Banks can come under pressure when the gap between short-term and long-term interest rates narrows because their profits depend partly on that difference.
The yield on the 10-year US Treasury note was little changed at 4.96 per cent, still above the 3.97 per cent level recorded before the war with Iran began.
Markets elsewhere were broadly firmer. Hong Kong shares rose 0.2 per cent and Shanghai gained 0.1 per cent after Alibaba unveiled new artificial intelligence chip technology, which it described as China’s most powerful AI chip. London’s FTSE 100 was an exception, slipping 0.3 per cent.
