Markets Overview

  • ASX SPI 200 futures up 0.3% to 8,871.00
  • S&P 500 up 0.4% to 6,693.75
  • Dow Average up 0.1% to 46,381.54
  • Aussie up 0.1% to 0.6600 per US$
  • US 10-year yield rose 1.9bps to 4.1467%
  • Australia 3-year bond yield rose 1.8 bps to 3.44%
  • Australia 10-year bond yield rose 2.8 bps to 4.27%
  • Gold spot up 1.7% to $3,746.86
  • Brent futures down 0.1% to $66.60/bbl

Economic Events

  • 09:00: (AU) Sept. S&P Global Australia PMI Compo, prior 55.5
  • 09:00: (AU) Sept. S&P Global Australia PMI Mfg, prior 53.0
  • 09:00: (AU) Sept. S&P Global Australia PMI Servi, prior 55.8
  • 11:00: (AU) Australia to Sell A$300 Million 4.75% 2054 Bonds

Australia’s central bank Governor Michele Bullock said the interest rate-setting board will weigh recent evidence showing the economy has been performing in line or slightly stronger than anticipated at next week’s policy meeting.

Asian stocks looked set for modest gains early Tuesday as Wall Street shares were lifted by renewed big tech optimism.

Equity futures pointed to Tokyo and Sydney benchmarks edging higher. Hong Kong looked flat as the financial hub awaits the arrival of one of its strongest typhoons in years, with dozens of flights expected to be cancelled.

The S&P 500 notched its 28th record of the year as Nvidia Corp. jumped about 4% after pledging to invest up to $100 billion in OpenAI. The investment will help fund data centers with at least 10 gigawatts of capacity, powered by Nvidia’s advanced AI chips to train and deploy OpenAI’s models.

At a time when equities are yet again at all-time highs on the back of strength in big tech, investors should be “responsibly bullish,” according to Tony Pasquariello at Goldman Sachs Group Inc.

“Do I love the positioning setup and tactical risk/reward? I don’t,” he wrote. “Do I think you should be stepping in front of the US mega cap tech freight train? I don’t.”

Action was relatively muted in the bond market, with US yields slightly higher ahead of this week’s key inflation gauge and a trio of Treasury auctions. The dollar halted a three-day gain. The crypto world got hit. Gold rose to a record.

Several Fed officials are set to speak at public events, including Chair Jerome Powell on Tuesday. In his first policy speech since joining the Fed, Governor Stephen Miran laid out his argument for aggressively lowering interest rates.

Meantime, Fed Bank of St. Louis President Alberto Musalem noted he sees limited room for cuts amid elevated inflation. His Cleveland counterpart Beth Hammack said officials should be cautious to avoid overheating the economy.

Super typhoon Ragasa poses a potential test for Hong Kong’s push to keep markets open during severe weather, with Hong Kong International Airport halting flights starting Tuesday. The storm could delay the trading debut of Zijin Gold International Co. after the world’s biggest initial public offering in months.

Meanwhile, People’s Bank of China Governor Pan Gongsheng said any changes to monetary policy will be guided primarily by domestic factors, indicating moves made by the US Federal Reserve won’t determine Beijing’s interest-rate decisions.

In the US, investor focus is likely to shift to the Fed’s tolerance of sticky inflation in 2026, and away from worries about a weaker labor market, according to Morgan Stanley’s Michael Wilson.

“Should the administration’s intention to ‘run it hot’ play out next year while the Fed cuts rates, revenue and earnings growth could come in much stronger than expected,” he wrote.

The Fed’s preferred gauge of underlying inflation likely grew at a slower pace last month, offering policymakers some breathing room to address weakness in the US labor market.

A report on Friday is forecast to show the personal consumption expenditures price index excluding food and energy rose 0.2% in August, compared with 0.3% in July. On an annual basis, the so-called core measure is seen holding at a still-elevated 2.9%.

“August PCE is likely to show gradual tariff passthrough into goods prices and moderating services inflation,” said Oscar Munoz at TD Securities. “Personal income and spending likely moderated.”