Morning traders. Thanks loungers, especially @Ravgnome and @Patterns.
Heading off to a birthday breakfast, so I'm posting earlier than usual. Note: below are not final US figures - the market had half an hour left to run at time of posting. It would be great if someone could post final figures for the major US indices, please, as I won't be around for a couple of hours. Thanks in advance.
Outlook for the day: The share market has back-to-back gains within reach for the first time in a month following a second night of strong gains on Wall Street. The ASX 200 bounced 1.29% yesterday from Friday's five-month closing low.
ASX futures: up 39 points or 0.46% (NB: not final figure - see note at top)
Overnight themes:
US stocks surged as growing confidence in a December rate cut encouraged investors to pile back into the AI trade that has fuelled this year's bull market.
The S&P 500 was ahead 1.54% with half an hour left to trade. The Nasdaq Composite led with a rally of 2.64%. The tech-lite Dow Jones Industrial Average trailed with a gain of 212 points or 0.46% as value stocks underperformed growth sectors.
Alphabet accounted for much of the momentum as investors welcomed an upgrade to its AI model, Gemini 3, that was expected to help the Google-owner compete more effectively with OpenAI in the race for control of the Artificial Intelligence market. Shares in the company jumped 6.15%.
Chip-makers and data centre stocks were notably strong, with some posting double-digit gains as the AI trade flared back into life after several weeks of volatility amid concerns about inflated valuations. Broadcom was lately up 11.1%, Micron Technology up 7.94% and Nvidia 1.51%. Palantir, AMD, Meta and Amazon also rose.
The market was building on a strong session on Friday after influential central banker John Williams said the Federal Reserve had space to lower rates without reigniting inflation, clearing the path to a December cut. Overnight, Fed Governor Christopher Waller said he will back a December cut. “My concern is mainly labour market, in terms of our dual mandate. So I’m advocating for a rate cut at the next meeting,” Waller told Fox Business Network.
The odds on a cut next month jumped from around 40% to near 80% overnight, according to the CME Group's FedWatch tool. "When New York Fed President John Williams told us that a December rate cut was still on the table, I think that gave investors the reason to breathe a sigh of relief," Sam Stovall, chief investment strategist of CFRA Research, told Reuters.
Market expectations for a rate cut face several hurdles this week in the form of economic data delayed by the federal government shutdown, including inflation figures, retail sales and housing reports. Wall Street closes on Thursday for the Thanksgiving holiday.
The three sectors dominated by Big Tech set the overnight pace. Communication services was up 3.86% in late trade, tech 2.5% and consumer discretionary 1.87%. Other sector gains were significantly more modest: utilities +1.07%, health +0.5% and financials +0.4% were next best. Three sectors sat out the rally: consumer staples -1.32%, energy -0.46% and real estate +0.05%.
Rate-cut optimism helped precious metals kick higher as investors chased assets seen as havens when rates fall. "The market is increasingly getting convinced that the U.S. Federal Reserve is on track to cut interest rates in December," Bart Melek, head of commodity strategies at TD Securities, told Reuters. Spot gold was lately up US$56.14 or 1.38% to US$4,117.86 an ounce. Earlier, US gold futures settled US$14.70 or 0.4% ahead at US$4,094.20. Silver, platinum and palladium also rose.
Iron ore broke a two-session losing run after Beijing upped the pressure on BHP by adding a new ban on a particular type of imported ore to an existing ban as the state buyer negotiates a new contract with the Australian mining giant. Industry sources said the state buyer, China Mineral Resources Group, had asked steel mills to stop buying low-grade Jinbao fines. “CMRG told mills that they are not allowed to take delivery of Jinbao fines from ports in three days… so there might be a hustle and bustle at ports these few days,” one of the unnamed sources told Reuters. The new ban follows an earlier pause on buying Jimblebar blend fines. BHP said negotiations were "ongoing". Benchmark ore on the Dalian Commodity Exchange bounced 0.44% to US$111.23 a metric ton.
Copper was little changed during a positive session on the London Metal Exchange after the odds on a December US rate cut jumped late last week. Benchmark LME copper edged up 0.04% to US$10,781.50 per metric ton. Aluminium, nickel, zinc, tin and lead all rose.
Key events today:
S&P 500: up 102 points or 1.54%
Dow: up 212 points or 0.46%
Nasdaq: up 588 points or 2.64%
VIX: down 11.52% to 20.73
US 10-year treasury yield: down 2.9 points to 4.039%
Dollar: up 0.03% to 64.63 US cents
Iron ore (Dalian): up 0.44% to US$111.23
Brent crude: up 81 US cents or 1.29% to US$63.37
Gold (futures): up US$14.70 or 0.4% to US$4,094.20
Gold (spot): up US$56.14 or 1.38% to US$4,117.86
NYSE Arca Gold Bugs: up 5.21%
Silver (spot): up US$1.17 or 2.34% to US$51.18
Palladium (spot): up US$24.50 or 1.77% to US$1,405.50
Antimony (China ore): up 8.11% to US$18,444
Bitcoin: up 1.21% to US$88,672
Copper (LME): up 0.04% to US$10,781.50
Nickel (LME): up 0.75% to US$14,730
Lithium carbonate (China spot battery grade): down 0.06% to US$11,445
Global X Lithium & Battery Tech ETF: down 0.32%
Uranium (spot): steady at US$75.88
Global X Uranium ETF (URA): up 3.61%
BHP: down 0.41% (US); up 0.05% (UK)
Rio Tinto: up 0.33% (US); up 0.89% (UK)
