Markets Overview
- ASX SPI 200 futures down 0.4% to 8,961.00
- S&P 500 down 0.3% to 6,730.93
- Dow Average down 0.6% to 46,338.75
- Aussie down 0.5% to 0.6551 per US$
- US 10-year yield rose 2.2bps to 4.1403%
- Australia 3-year bond yield rose 0.2 bps to 3.56%
- Australia 10-year bond yield fell 1.4 bps to 4.35%
- Gold spot down 1.7% to $3,974.27
- Brent futures down 1.7% to $65.14/bbl
Economic Events
- 09:00: (AU) RBA’s Bullock and Kent-Testimony
RBA Governor Michele Bullock and Assistant Governor Christopher Kent appear before the Senate Economics Legislation Committee.
Asian equities were primed for a pullback early Friday after a rally in US stocks stalled amid concern valuations may have become stretched following their relentless surge.
Equity index futures for Japan, Australia and Hong Kong all fell, pointing to lower opens when stock trading commences. A gauge of US-listed Chinese companies slid 2% Thursday, a sign the recent gains in Chinese shares are also due to pause.
The S&P 500 closed 0.3% lower, while the tech-heavy Nasdaq 100 dropped 0.2%. The declines followed a 36% gain in the S&P 500 from its low in April, when US tariff announcements spooked investors. The rally has been spurred on by large tech stocks linked to artificial intelligence, leading some analysts to suggest a bubble has been forming.
“Some areas of the market appear overheated,” said Keith Lerner at Truist Advisory Services Inc. “The extended stretch without a meaningful pullback leaves the market more sensitive to negative surprises.”
Treasuries fell across the curve Thursday, while Bloomberg’s dollar index rose to a 10-week high. Silver hit the highest since 1980 as demand for precious metals spread beyond gold, which edged lower. Oil sank as Middle East tensions cooled.
The yen headed for its biggest weekly loss in a year even as Japan’s new ruling party leader Sanae Takaichi, a pro-stimulus lawmaker, said she wasn’t in favor of an excessively weak currency.
The US rushed to stabilize Argentina’s economy on Thursday, offering $20 billion in financing and carrying out a rare intervention in currency markets to prop up the peso after weeks of sharp declines.
In Asia, data set for release Friday includes producer prices in Japan and industrial production in Malaysia. Markets are closed in Taiwan.
Elsewhere, the Trump administration is considering whether to take a major step toward restricting the US operations of TP-Link Systems Inc., a China-linked router-maker whose Wi-Fi equipment is popular in the American market, according to people familiar with the matter.
“One of the main reasons the AI bubble talk is misplaced is that the leading spenders continue to enjoy increased earnings power, according to Daniel Skelly, head of Morgan Stanley’s Wealth Management Market Research & Strategy Team.
“These aren’t the dot-com companies of a quarter-century ago that didn’t have earnings, or even viable business models,” he said. “That doesn’t mean the market won’t have setbacks, though. Investors may want to take a look at quality dividend-growth stocks.”
Even after a series of records to all-time highs, stock positioning data from JPMorgan Chase & Co. suggests some investors including hedge funds are holding back.
The equity beta of monthly reporting Macro hedge funds — an indicator of their exposure — remains modestly negative despite becoming slightly less so in recent months, the team led by Nikolaos Panigirtzoglou said.
The strategists added that speculative positioning in US equity futures is relatively close to their long-run median, after having been well above the median in 2024 and in the first quarter of 2025. This signals that overall exposure is only close to historical average rather than extended.
