Outlook for the day: Firmly positive after the prospect of a September rate cute helped US stocks scale fresh heights. Materials ranked high among the night's best-performing US sectors.
ASX futures: up 73 points or 0.94%
Overnight themes:
US stocks closed at record levels after the Federal Reserve pushed back against a warning that cutting rates before the November presidential election would be seen as interfering in politics.
Fed Chair Jerome Powell said the central bank would "make decisions when and as they need to be made", clearing the way for a possible September rate cut.
The S&P 500 jumped 1.02%, closing above 5,600 for the first time at 5,634. All 11 sectors advanced.
A rally in AI chip stocks helped propel the Nasdaq up 1.18% to a seventh straight record close.
The Dow gained 1.09% as all but two of its component companies joined the rally. Home Depot, Travelers and Apple were among the best on the night.
Powell hosed down suggestions that the bank might be forced to wait until after the November election to act on rates: "Our undertaking is to make decisions when and as they need to be made, based on the data, the incoming data, the evolving outlook and the balance of risks, and not in consideration of other factors, and that would include political factors," he told the House Financial Services Committee. "We have a long history of doing that, including during election years... It's just not appropriate for us to get into the business of thinking about election cycles at all, one way or the other."
The odds on a September cut climbed to 74% from around 70% on Tuesday, according to CME's FedWatch tool.
Upbeat revenue from Taiwain Semiconductor Manufacturing triggered a strong rally in chip stocks. The Philadelphia Semiconductor index climbed 2.42% to an all-time high. Nvidia put on 2.69%.
Tech was the best of the sectors, gaining 1.63%. Also notably strong were materials +1.34%, health +0.98% and utilities +0.95%.
Oil scored its first advance in four sessions after US crude inventories declined for a second straight week. Brent crude firmed 0.5%.
Gold miners rallied as increased bets on a September rate cut helped push the US dollar lower. The NYSE Arca Gold Bugs index put on 2.79%.
Copper fell for a third session in London following disappointing Chinese inflation data. Consumer prices grew a tepid 0.2% year-on-year in June, down from annual growth of 0.3% the previous month and below economists' expectations. Factory-gate prices contracted by 0.8%.
“The inflation data shows that [Chinese] demand is not very good” - Dan Smith, head of research at Amalgamated Metal Trading (per Reuters).
Iron ore slumped in China and Singapore after weak demand dragged steel prices to a three-month low. Rebar and and hot-coiled steel traded at levels last seen in April as soft inflation data pointed to pressures on the economy. Benchmark ore in China dropped 1.8%. Singapore ore skidded 3.4%.
Key events today:
June inflation expectations - 11 am AEST
US inflation (CPI) - tonight
S&P 500: up 57 points or 1.02%
Dow: up 429 points or 1.09%
Nasdaq: up 218 points or 1.18%
Dollar: up 0.07% to 67.46 US cents
Iron ore (Dalian): down 1.8% to US$111.74
Brent crude: up 42 US cents or 0.5% to US$85.08
Gold: up US$11.80 or 0.5% to US$2,379.70
