ASX Market Outlook and asx dividends Focus as Global Cues Weigh on Sentiment

Highlights:

• ASX 200 futures edge lower following Wall Street's continued upward streak despite weaker economic signals

• US economic contraction and China factory data raise concerns over trade and commodity demand

• Microsoft and Meta earnings lift after-hours mood while resource stocks face downward pressure

The Australian share market is expected to open softer as ASX 200 futures track lower despite a sustained rise in the S&P 500, which closed stronger for a seventh straight session. The ASX 200 Index recently ended the previous session higher, while the ASX Small Ordinaries also recorded mild gains over the past week. However, caution appears to dominate early trade today amid global data signals.

Tuesday's market performance saw support from sectors including Information Technology, Real Estate, and Consumer Discretionary. Meanwhile, Utilities, Energy, and Materials shares lagged. Gains came even as domestic inflation data showed a stronger-than-expected quarterly rise, though annual inflation entered the central bank’s preferred range for the first time in several years.

Expectations around asx dividends continue to influence positioning as interest rate outlooks shift. Market pricing points toward adjustments from the Reserve Bank of Australia, with speculation mounting over future monetary policy steps.

China Manufacturing and Iron Ore Market Under Pressure

Weak factory activity data out of China added weight to commodity-linked stocks. The official Purchasing Managers Index for April fell, indicating contraction in manufacturing. In response, iron ore prices dipped slightly while copper futures experienced a larger pullback.

The impact of this data was reflected in movements of major resource-linked entities. Offshore trading showed American Depositary Receipts of BHP Group Ltd (ASX:BHP) declining, highlighting a cautious tone for miners. Concerns persist around raw material demand, particularly if industrial output in key markets continues to soften.

US Growth Slips but Spending Remains Firm

Preliminary readings revealed a contraction in US gross domestic product for the March quarter, marking the first decline in several years. This was largely attributed to a rise in imports ahead of potential trade-related shifts. Despite this, broader consumption figures remained firm, with the latest inflation-linked index indicating continued spending resilience.

Markets moved higher despite these figures, buoyed by tech earnings later in the session. Employment figures from the private sector also provided support, although the number of new roles was below previous levels.

Mixed Earnings Results Drive Market Rotation

In corporate news, Super Micro Computer Inc and Snap Inc saw sharp declines after their respective earnings reports underwhelmed expectations. However, sentiment shifted positively during after-hours trading as Microsoft Corp reported stronger-than-forecast results, with significant growth in its cloud division driven by artificial intelligence services.

Meta Platforms Inc also released quarterly numbers that exceeded forecasts, pushing its share price upward. Investors now turn their attention to upcoming results from other large-cap technology firms and further economic data releases from the US.

European Markets Lifted by Healthcare Stocks

European indices ended higher on Wednesday, with the FTSEurofirst 300 supported by strength in the healthcare sector. However, mining and commodity-focused shares dragged following a production update from Glencore, which revealed a drop in copper output.

The FTSE 100 also closed in positive territory but remained in a broader monthly downtrend, echoing trends across several major European bourses. Currency movements added further complexity, with major units softening against the US dollar.

Commodities and Currencies React to Macro Shifts

Oil markets moved lower after supply-side commentary from Saudi Arabia hinted at upcoming increases in output. Both Brent and Nymex benchmarks experienced notable declines over the past month, reflecting shifting dynamics in global energy markets.

Metals faced pressure amid weak demand signals, with copper and aluminium futures both slipping. Gold also moved marginally lower, though expectations of future rate adjustments offered some support to spot prices. Meanwhile, iron ore remained subdued on reports of steel production controls in China.

Currency trading saw the Australian dollar trade in a narrow range against the US dollar, with movement influenced by inflation data and external market pressures. The euro and Japanese yen also weakened, contributing to a stronger US dollar environment.