Markets Overview

  • ASX SPI 200 futures down 0.2% to 9,019.00
  • S&P 500 down 0.6% to 6,697.02
  • Dow Average down 0.7% to 46,579.60
  • Aussie little changed at 0.6489 per US$
  • US 10-year yield little changed at 3.9550%
  • Australia 3-year bond yield rose 0.6 bps to 3.34%
  • Australia 10-year bond yield fell 0.5 bps to 4.11%
  • Gold spot down 0.5% to $4,102.87
  • Brent futures up 3.5% to $63.47/bbl

Economic Events

  • 10:30: (AU) Australia to Sell A$1 Billion 98-Day Bills
  • 10:30: (AU) Australia to Sell A$1 Billion 126-Day Bills
  • 11:00: (AU) Australia to Sell A$100M 0.25% 2032 Inflation-Linked Bonds

Cboe Global Markets’ Australian unit is targeting firms with a market capitalization of at least A$30 million for IPO once its corporate listings business is fully operational. Fortescue and Northern Star are set to release quarterly updates.

Asian stocks were poised to open lower after a volatile session on Wall Street that saw broad losses across equities and haven assets.

Equity-index futures showed benchmarks from Tokyo to Shanghai to Sydney all trending lower. The Nasdaq 100 lost 1% after a tepid outlook from Texas Instruments Inc. and a 10% slump in Netflix Inc. In late hours, Tesla Inc. slid as earnings missed estimates despite a sales surge.

Adding to the jitters, traders were watching developments in Washington after the Trump administration said it’s considering curbs on software exports to China, stoking fresh trade tensions. Meanwhile, oil jumped jumped after the US announced sanctions on Russia’s biggest producers in its latest bid to pressure President Vladimir Putin to negotiate an end to the war in Ukraine.

Wednesday was another session in which assets favored by retail momentum traders bore the worst losses, among them precious metals, crypto and companies in the artificial-intelligence space. Indexes used by quant investors to track the theme in the equity market, such as the Bloomberg US Pure Momentum Portfolio, have fallen sharply in recent days.

The last week has seen a significant cooling in enthusiasm for areas of the market that since the start of August had gone “parabolic,” according to Bespoke Investment Group.

“It appears that, at least temporarily, the music has stopped and the party has ended for the most-speculative names,” the Bespoke strategists said. “No one knows when the music will pick back up again, but usually, the higher they go, the harder they fall.”

The S&P 500 closed below 6,700. Beyond Meat Inc. whipsawed, echoing the meme-stock frenzy that periodically roil the market. The Russell 2000 lost 1.5%. In late trading, International Business Machines Corp. reported disappointing revenue in its Red Hat unit.

The yield on 10-year Treasuries fell one basis point to 3.95%. A $13 billion sale of 20-year bonds was strong. Bitcoin declined 2.6%. The dollar wavered. Gold sank as much as 2.9% before paring losses. Oil jumped.

In Japan, newly appointed Prime Minister Sanae Takaichi ordered a fresh round of economic measures to help households and businesses cope with persistent inflation.

Elsewhere in the region, Yangtze Memory Technologies Co. is weighing an initial public offering that could value the chipmaker at more than $40 billion, according to people familiar with the matter — potentially one of the largest listings in years.

At a time when the equity rally has slowed, the flip side is that the proportion of US companies beating earnings expectations this quarter is the highest since 2021. Most S&P 500 firms typically top expectations, but this season stands out considering that analysts had set the bar higher.

Companies should continue to deliver superior earnings growth supported by a robust AI investment cycle, ongoing deficit spending and a still-resilient consumer, JPMorgan Chase & Co.’s Dubravko Lakos-Bujas says.

Meantime, the Federal Reserve has shown other US regulators the outlines of a revised plan that would dramatically relax a Biden-era bank capital proposal for Wall Street’s largest lenders, according to people familiar with the matter.

Separately, the US central bank is no longer receiving data on private-sector employment from an independent provider, adding to policymakers’ lack of timely information on the economy amid the ongoing federal government shutdown.

Payroll services firm ADP Research stopped providing the data, which covers about 20% of the US private labor force, after an Aug. 28 speech by Fed Governor Christopher Waller that referenced the statistics, according to a person familiar with the situation.