Markets Overview

  • ASX SPI 200 futures up 0.4% to 8,788.00
  • S&P 500 up 0.1% to 7,609.78
  • Dow Average up 0.4% to 51,307.79
  • Aussie up 0.3% to 0.7180 per US$
  • US 10-year yield little changed at 4.4453%
  • Australia 3-year bond yield rose 1.1 bps to 4.53%
  • Australia 10-year bond yield fell 0.1 bps to 4.88%
  • Gold spot little changed at $4,488.36
  • Brent futures up 0.9% to $95.81/bbl

Economic Events

  • 09:00: (AU) May S&P Global Australia PMI Compo, prior 47.8
  • 09:00: (AU) May S&P Global Australia PMI Servi, prior 47.7
  • 11:00: (AU) Australia to Sell A$1 Billion 3% 2033 Bonds on June 3
  • 11:30: (AU) 1Q GDP YoY, est. 2.6%, prior 2.6%
  • 11:30: (AU) 1Q GDP SA QoQ, est. 0.4%, prior 0.8%

Australia’s economy likely expanded at a moderate pace in the first quarter, with growth slowing from the inventory-driven surge of the previous quarter, according to Bloomberg Economics.

Asian stocks were set to track Wall Street higher as renewed enthusiasm for the artificial-intelligence trade drove the S&P 500 to a ninth day of gains.

Equity-index futures pointed to gains in Japan and Taiwan, while contracts for Hong Kong edged lower. On Tuesday, the S&P 500 Index closed at an all-time high after notching its longest winning streak since May as a gauge of chipmakers surged nearly 6%.

A sense of caution came as oil rose over 2% and US equity-index futures dropped 0.3%. The dollar also strengthened against all its Group-of-10 peers, while the yen neared the important 160-per-dollar level. Bitcoin slid to around $66,300.

Treasuries retreated from near their best levels of the past month as the first of three labor-market reports this week backed wagers that the Federal Reserve’s next move will be to raise interest rates.

Investors piling into AI-linked stocks have propelled global equities to record highs, with hopes for a deal to end the war that has rattled markets worldwide providing an additional boost. Traders have looked past concerns about elevated valuations, betting that strong earnings growth and easing geopolitical tensions will continue to support risk assets.

“Tech continues to dominate the market,” said veteran strategist Louis Navellier. “The trend remains positive, with the catalyst for further material gains possible with a resolution with Iran.”

Meanwhile, President Donald Trump remained optimistic the US can reach an interim peace deal soon. He disputed reports in Iranian state media that said talks with Washington had been suspended over the fighting in Lebanon, saying the two sides have been “continuously” having conversations, including “today.”

Officials in Tehran are discussing their “final text” to send to the US, Iran’s Mehr news agency reported. The primary focus for the oil market remains the Strait of Hormuz, which handled about one-fifth of global oil and liquefied natural gas flows before the war began — with visible commercial traffic through the waterway remaining limited.

Even as businesses navigated rising energy costs sparked by the Iran war, US job openings jumped in April to the highest level in almost two years and layoffs fell, adding to signs the labor market remained resilient.

“The jobs market continues to hold its ground,” said Bret Kenwell at eToro. “There’s hope that energy prices will retreat after a geopolitically charged surge in the first quarter, allowing the Fed to stay on hold while inflation eases in the second half of the year. Pair that with rising earnings expectations, and it could help propel stock prices higher.”

A boom in stocks is being driven by an appetite for profit that’s outweighing fears about economic disruption and inflation risks, said Goldman Sachs Group Inc. Chief Executive Officer David Solomon.

“We are definitely in a moment where there’s more greed than there is fear,” Solomon said in an Economic Club of New York appearance Tuesday. “The capital is available.”

In currencies, the yen weakened toward the 160 per US dollar as traders awaited Bank of Japan Governor Kazuo Ueda’s planned speech for clues on the outlook for interest rates.

The currency underperformed all its Group-of-10 peers in May despite record spending by Japan. That puts it in danger of weakening to 160 against the dollar well before any support comes from the Bank of Japan in the form of an expected interest hike on June 16.

Elsewhere, US investment-grade bond sales reached $1 trillion sooner than in any year since 2020 as historically low spreads and a spending surge on AI fuel borrowing by blue-chip companies.