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Highlights
ASX 200 futures showed muted movement in early trade
Wall Street closed mixed as US services and jobs data weakened
Lithium and AI-related sectors saw notable overnight traction
ASX 200 futures opened flat as sentiment was weighed by Wall Street’s mixed session overnight. The benchmark S&P 500 (INDEXSP: .INX) closed marginally higher, the Dow Jones Industrial Average (INDEXDJX: .DJI) eased, while the Nasdaq Composite (INDEXNASDAQ: .IXIC) edged up. Softer US services and private payrolls data influenced the cautious tone, contributing to a shift in interest rate expectations.
US Economic Data Adds to Market Volatility
US economic indicators offered a mixed picture. The ISM Services PMI unexpectedly entered contraction territory for the first time in a year, while private payroll additions came in below expectations. These developments triggered a dip in US Treasury yields, with the US 10-Year bond yield pulling back. The VIX (INDEXCBOE: VIX) remained subdued, indicating a restrained response from volatility markets despite the data shift.
Lithium Stocks Show Momentum
Lithium-related equities gained traction following a notable rebound in Pilbara Minerals (ASX:PLS). The upward trend extended to global counterparts overnight, as sentiment improved across the critical minerals sector. Strength in battery-related commodities and positioning around bottoming expectations contributed to the moves in the broader materials sector.
Technology and Communication Stocks Gain Ground
The information technology and communication services sectors on the S&P 500 showed relative strength. AI-driven themes remained active, with updates around advertising budgets boosting interest. Companies in the sector, such as Meta Platforms (NASDAQ:META), remained in focus after reports of long-term energy supply agreements to support infrastructure growth. CrowdStrike (NASDAQ:CRWD), however, faced downside after revenue guidance underwhelmed market expectations.
Consumer and Energy Sectors Lag
On the downside, energy stocks pulled back as WTI oil futures dropped following updates from OPEC+. Saudi Arabia reportedly signaled an intention to accelerate supply hikes in an effort to regain market share, prompting broader in energy names. Utilities and consumer staples were also under pressure as safe-haven interest rotated out of defensive plays.
Regional Markets Reflect Mixed Tone
Asian indices delivered a mixed performance. South Korea's Kospi (KRX: KOSPI) surged after a decisive election result, lifting the index into a technical bull market. Japan’s Nikkei 225 (INDEXNIKKEI: NI225) also advanced. Hong Kong’s Hang Seng (INDEXHANGSENG: HSI) and China's Shanghai Composite (SHA: 000001) gained modestly, while Canada’s S&P/TSX (INDEXTSI: OSPTX) and the UK’s FTSE 100 (INDEXFTSE: UKX) ended lower. The DAX (INDEXDB: DAX) in Germany posted firm gains, reflecting strength in European markets.
Company Updates Impact Sector Performance
In corporate news, Volvo (STO: VOLV-B) reported a decline in global vehicle deliveries for May. Tesla (NASDAQ:TSLA) recorded a dip in China-made electric vehicle sales, while BYD (HKG: 1211) reported a pickup in volumes. HP (NYSE:HPQ) topped revenue forecasts, with expectations for trade-related tariffs to impact results less than earlier feared. Toyota Industries (TYO: 6201) saw a sharp fall in share price following a take-private bid.
Currency and Commodities
The Australian dollar firmed against the greenback, while gold and copper prices inched higher. Oil continued to trade under pressure. In digital assets, bitcoin and ethereum registered mixed moves overnight.
Broader Market Landscape
US equity sector performance remained uneven. Gains in technology and communications were offset by declines in utilities and energy. Market participants maintained a cautious stance with rate cut pricing evolving in response to economic signals. Futures positioning showed increased hedging against larger rate moves, underscoring the uncertain outlook.
