The Australian stock market is expected to open lower after a strong sell-off on Wall Street led by technology stocks and impending inflation data.
Key points:
- The ASX will fall after closing lower on Thursday
- Apple and Amazon led the falls on Wall Street
- U.S. investors were looking at impending consumer price data
ASX SPI 200 futures fell 0.8% to 6,964 at 8:15 a.m. EAST.
The Australian dollar remained stable at 70.98 US cents.
On Wall Street, investor anxiety rose from Friday’s data, which is expected to show that consumer prices remained high in May.
Sales rebounded towards the end of the session. Mega-growth stocks led the way, with Apple and Amazon falling 3.6 percent and 4.2 percent, respectively, and putting more pressure on the S&P 500 and Nasdaq.
Communications and technology services saw the biggest declines among sectors, although all 11 sectors of the S&P 500 ended the day lower.
Recent oil price hikes also affected sentiment ahead of the U.S. Consumer Price Index report on Friday.
“We are preparing for tomorrow’s inflation news,” said Peter Tuz, chairman of Chase Investment Counsel.
“I see it mixed. If the total is high and the base number shows a kind of drop, I really think the markets could recover because it will show that things are changing a little bit.”
Data is expected to show that consumer prices rose 0.7 percent in May, while the Basic Consumer Price Index (CPI), which excludes volatile food and energy sectors, rose 0.5 percent during the month.
The Dow Jones Industrial Average fell 638.11 points, or 1.94%, to 32,272, the S&P 500 lost 97.95 points, or 2.38%, to 4,017, and the Nasdaq Composite fell 332, 05 points, or 2.71,75%
The three main indices recorded their largest daily percentage falls since mid-May. The S&P 500 was down 15.7 percent last year and the Nasdaq was down 25 percent.
Higher-than-expected inflation readings could raise fears that the US Federal Reserve will raise interest rates more aggressively than previously expected.
The central bank has raised its short-term interest rate by three-quarters of a percentage point this year and intends to keep it up by 50 basis points at its meeting next week and again in July.
The price of iron ore futures fell $ 2.06 or 1.4% to $ 143.82 a tonne.
In the oil markets, Brent crude fell 0.5% to $ 122.93 a barrel, while West Texas crude oil lost 0.8% to $ 121.36 a barrel.
It was a different story in Europe, the pan-European STOXX 600 index lost (-1.3pc), along with the German DAX (-1.1pc) and the British FTSE (-1.5pc)
ABC / Reuters