Outlook for the day: The Australian share market has an all-time high in its sights following a third night of gains on Wall Street.
ASX futures: up 24 points or 0.28%
Overnight themes:
US stocks rose for a third session as White House officials continued to talk up progress in negotiations with China that could lower trade barriers for both countries, potentially boosting global growth.
The S&P 500 climbed 0.55%, finishing near is high at the end of a choppy session. The Dow advanced 105 points or 0.25%. The Nasdaq Composite put on 0.63% as Tesla built on its rebound from last week's bloodbath.
US Commerce Secretary Howard Lutnick told reporters negotiations with China were going "really, really well" as talks continued for a second day. " We’re very much spending time and effort and energy - everybody’s got their head down working closely,” Lutnick said. Treasury Secretary Scott Bessent said they had had two days of productive talks. Negotiations would "continue as needed". This week's talks came after both sides accused the other of violating a truce aimed at lowering tensions after import tariffs reached 145% earlier this year.
US stocks have climbed back towards record levels amid hopes that the White House will secure more favourable trade terms with trading partners without imposing the sweeping "reciprocal tariffs" announced by President Donald Trump earlier this year.
"The expectation is that they'll figure this out, and that the Liberation Day tariff levels are never going to be seen. You can't get to market valuations where we've got them and have those tariff levels get anywhere close to reality," Scott Ladner, chief investment officer at Horizon Investments, told Reuters.
Overnight, the World Bank cut its global growth forecast for the year by four-tenths of a percent to 2.3%, citing higher tariffs as headwind for most economies.
“Technically, shares have been on a nice run eclipsing key levels to get back on track... The rally looks like many other technology names that are trying to get back to old highs. The good news is that given the change in trajectory, even weakness looks to have a soft landing spot and good entry point from a risk/reward perspective,” Jay Woods, chief global strategist of Freedom Capital Markets, told CNBC.
Ten of eleven S&P sectors advanced, led by energy +1.77% and consumer discretionary +1.19%. Industrials was the only drag, falling 0.44%.
Gold dipped as traders awaited the outcome of negotiations that could tamp down trade tensions between the US and China, reducing buying interest in havens. Gold futures settled US$11.50 or 0.3% lower at US$3,343.40 an ounce. The spot price was lately down US$2.34 or 0.07% to US$3,323.48. Silver pulled back from a 13-year high, easing 22 US cents or 0.59% to US$36.54 an ounce. "Over the last several sessions, we've seen gold retrace a bit off the recent highs, mostly done on the back of optimism in regards to the expectations of negotiations between China and the U.S., UK and Russia," David Meger, director of metals trading at High Ridge Futures, told Reuters.
Copper declined as trade-talk and tariff uncertainty sapped buying appetite for higher prices. Benchmark copper on the London Metal Exchange eased 0.69% to US$9,725 a metric ton, reversing Monday's advance when US and Chinese negotiators commenced talks in London. Traders also await the result of an investigation into a possible copper tariff ordered by US President Trump back in February.
Iron ore fell for a second day amid evidence of growing supply. Ore shipments from Australia and Brazil increased 2% last week from the week before to the highest since December, according to a report by consultancy Mysteel. Benchmark ore on the Dalian Commodity Exchange ended daytime trade 0.85% weaker at US$97.16 a metric ton. The Singapore ore benchmark fell 0.2% to US$95.47.
"We have a lot of market complacency right now. Volatility seems to be drifting lower across markets even though we have yet to see any breakthrough on trade talks with China," Ole Hansen, head of commodity strategy at Saxo Bank, told Reuters.
Key events today:
US May consumer inflation (CPI) - tonight
S&P 500: up 33 points or 0.55%
Dow: up 105 points or 0.25%
Nasdaq: up 124 points or 0.63%
VIX: down 1.22% to 16.95
US 10-year treasury yield: steady at 4.477%
Dollar: up 0.1% to 65.22 US cents
Iron ore (Dalian): down 0.85% to US$97.16
Brent crude: down 14 US cents or 0.2% to US$66.90
Gold (futures): down US$11.50 or 0.3% to US$3,343.40
Gold (spot): down US$2.34 or 0.07% to US$3,323.48
Silver (spot): down 22 US cents or 0.59% to US$36.54
Palladium (spot): down US$19 or 1.75% to US$1,064.50
Antimony (China ore): up 0.12% to US$20,339
NYSE Arca Gold Bugs: down 1.62%
Bitcoin: up 0.97% to US$109,772
Copper (LME): down 0.69% to US$9,725
Nickel (LME): down 0.23% to US$15,330
Lithium carbonate (China spot battery grade): up 0.28% to 7,417 yuan
