Outlook for the day: Cautiously positive after US stocks edged to fresh records and iron ore, gold and industrial metals all rose.
ASX futures: up 12 points or 0.14%
Overnight themes:
US stocks reset their closing records despite finishing below session highs as a looming deadline for trade deals tempered optimism about corporate earnings.
The S&P 500 posted its first close above 6,300 after trimming its advance to 0.14% in the final hour of trade. The Nasdaq also recorded a new closing high, gaining 0.38% ahead of trading updates this week from Google, Tesla, Intel and IBM. The Dow turned negative in the final minutes of trade, shedding 19 points or 0.04%.
The S&P 500 and Nasdaq Composite hit intraday records, thanks in large part to gains in Alphabet, Amazon and Meta. Alphabet is the first of the "Magnificent Seven" group of market leaders scheduled to report this earnings season, releasing a quarterly update tomorrow night. Verizon gained 4.04% overnight as investors continued to reward companies beating earnings expectations.
"So far, companies that have reported have, in general, met or beat guidance from the prior quarter, and we haven't seen any degradation either in corporate profits or consumer spending," Tom Hainlin, national investment strategist at U.S. Bank Wealth Management, told Reuters.
The Trump administration continued to talk up trade deals ahead of the August 1 deadline for agreements with dozens of trading partners. Commerce Secretary Howard Lutnick insisted he was confident in reaching a deal with the European Union despite reports that the EU was preparing retaliatory duties on US imports if negotiations fail. Lutnick said August 1 was a "hard deadline" for deals, but added “nothing stops countries from talking to us after August 1”.
The three sectors dominated by the Magnificent Seven (tech, communication services, consumer discretionary) gained between 0.13% and 1.9%. Also strong: materials +0.54% and real estate +0.35%. The night's biggest sector drags were energy -0.96%, health -0.61% and industrials -0.6%.
BHP and Rio Tinto climbed in overseas trade as China's announcement of a mega-dam project in Tibet helped power iron ore towards a five-month high. Beijing announced construction had started on the world's largest hydroelectric dam, which is forecast to require up to four times as much steel as the previous largest hydroelectric power station. Benchmark ore on the Dalian Commodity Exchange jumped 2.08% to US$112.74 per metric ton. BHP firmed 2.58% in US trade and 3.14% in the UK. Rio posted gains of 2.49% in the US and 2.73% in the UK.
Gold hit a five-week high as US tariff uncertainty helped drive the greenback and treasury yields lower. The US dollar index sank 0.61%, reducing prices of dollar-denominated commodities for buyers using other currencies. "With the August 1st deadline [for US trade deals] looming, it brings a level of uncertainty to the market and that certainly is supportive," David Meger, director of metals trading at High Ridge Futures, told Reuters. US gold futures settled US$48.10 or 1.4% ahead at US$3,406.40 an ounce. Spot gold surged US$46.20 or 1.38% to US$3,397.30.
Nickel and palladium rose after Russian giant Nornickel downgraded its 2025 production forecast ahead of major repairs. The producer cut its nickel forecast to 196,000-204,000 metric tons from 204,000-211,000 tons, and its palladium forecast to 2.677-2.729 million ounces from 2.704-2.756 ounces. "A series of major repairs is scheduled for the second half of the year to improve the reliability of the main technological equipment," Nornickel's Senior Vice-President Alexander Popov said. Nickel rallied 1.74% on the London Metal Exchange to US$15,510 per metric ton. Spot palladium was lately up up US$15.50 or 1.2% to US$1,302 per ounce. LME copper, zinc, aluminium, tin and lead also rose during a bright session overnight for industrial metals.
Key events today:
Minutes from this month's RBA rate policy meeting - 11.30 am AEST
Address by US Federal Reserve Chair Powell - tonight
US earnings season: General Motors, Coca-Cola, Lockheed Martin - tonight
S&P 500: up 9 points or 0.14%
Dow: down 196 points or 0.04%
Nasdaq: up 79 points or 0.38%
VIX: up 1.46% to 16.65
US 10-year treasury yield: down 4 points to 4.383%
Dollar: up 0.19% to 65.24 US cents
Iron ore (Dalian): up 2.18% to US$112.74
Brent crude: down 7 US cents or 0.1% to US$69.21
Gold (futures): up US$48.10 or 1.4% to US$3,406.40
Gold (spot): up US$46.20 or 1.38% to US$3,397.30
Silver (spot): up 75 US cents or 1.97% to US$38.92
Palladium (spot): up US$15.50 or 1.2% to US$1,302
Antimony (China ore): up 0.07% to US$19,801
NYSE Arca Gold Bugs: up 3.82%
Bitcoin: up 0.97% to US$117,002
Copper (LME): up 0.91% to US$9,867
Nickel (LME): up 1.74% to US$15,510
Lithium carbonate (China spot battery grade): up 2.1% to 8,363 yuan
Global X Lithium & Battery Tech ETF: up 0.83%
Uranium (spot): steady at US$71
Global X Uranium ETF(URA): down 1.93%
BHP: up 2.58% (US); up 3.14% (UK)
