Outlook for the day: Negative ahead of consumer price data that is expected to add to worries about "sticky" inflation.
ASX futures: down 24 points or 0.34%
Overnight themes:
US stocks sink as investors grapple with the threat of higher rates, surging bond yields, a looming government shutdown and weak economic data.
The Dow suffers its biggest fall since March, losing 1.14% and closing below its 200-day moving average. The S&P 500 drops to a three-month low. The Nasdaq extends its loss for the month towards 7%.
"We continue to adjust to the higher interest rates. What you are getting is increasingly a sense that the market is overvalued" - Brad McMillan, CIO at Commonwealth Financial Network.
Wall Street's "fear gauge", the VIX or CBOE volatility index, rises to its highest since May.
Treasury yields hold near 16-year highs after Jamie Dimon, CEO of JPMorgan, says interest rates may need to go higher to cool inflation.
House Republican leaders say President Joe Biden will have to tighten border restrictions to avert a federal government shutdown from Sunday. The White House has previously rejected similar proposals.
Housing and consumer confidence reports sharpen concerns about the economy. House sales decline 8.7% in August, three times as much as economists expected. The Conference Board's consumer confidence index drops from 108.7 last month to 103, also below expectations.
All 11 sectors decline, led by utilities (-3.05%), consumer discretionary (-2.03%) and tech (-1.78%). Energy fares least worst with a fall of 0.5% as Saudi-Russia production cuts provide a floor for crude oil.
Iron ore falls below Monday's two-week low ahead of China's Golden Week holiday and as troubles in the Chinese property sector muddy the demand outlook.
A 10-month high in the US dollar adds to pressure on metals. Spot gold trades briefly below US$1,900 an ounce. Copper falls to its lowest since May.
“Strength in the U.S. dollar, weak risk appetite coupled with concerns over China’s property sector amidst a challenging global growth backdrop are weighing on the base metals complex” - Standard Chartered analyst Sudakshina Unnikrishnan.
Key events today:
August consumer price index - 11.30 am AEST (expected: uptick in y.o.y. CPI from 4.9% to 5.2%)
US durable goods - tonight
S&P 500: down 64 points or 1.47%
Dow: down 388 points or 1.14%
Nasdaq: down 208 points or 1.57%
Dollar: down 0.29% to 64.03 US cents
Iron ore (Dalian): down 1.64% to US$115.04
Brent crude: up 67 US cents or 0.7% to US$93.96
Gold: down US$16.80 or 0.9% to US$1,919.80
NYSE Arca Gold Bugs: down 2.97%
Copper (LME): down 0.48% to US$8,106.50
Nickel (LME): down 1.36% to US$18,890
Lithium carbonate (China spot): % to US$
Global X Lithium & Battery Tech ETF: down 1.83% (34-month low)
