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Highlights
- ASX futures signal softer open despite Wall Street’s rally
- Strong CPI data challenges rate cut hopes in Australia
- Commodities slide on weak Chinese manufacturing data
Australian shares are poised to ease on Thursday, with ASX 200 futures down 28 points or 0.34% as of 8:30 am AEST, following a strong overnight performance on Wall Street. The S&P 500 closed higher for a seventh straight session, overcoming initial weakness sparked by softer US GDP data, and marking one of its most consistent streaks in recent times.
Back home, the S&P/ASX 200 Index added 0.69% on Tuesday to settle at 8126, finishing April with a 3.61% gain. The Information Technology, Real Estate, and Consumer Discretionary sectors were standout performers, while Utilities, Energy, and Materials saw modest declines.
The market rally came despite a stronger-than-expected March quarter CPI print, which showed headline inflation at 0.9% quarter-on-quarter versus expectations of 0.7%. Annual inflation held at 2.4%, while the Reserve Bank of Australia’s preferred trimmed mean metric fell within the 2–3% target range for the first time since 2021. Despite the CPI surprise, markets are pricing in a 95% probability of a 25 basis point rate cut in May, with over 100 basis points expected by year-end.
Concerns around China’s economic momentum resurfaced as the NBS manufacturing PMI fell to 49 in April from 50.5, indicating contraction. This weighed on commodity markets—iron ore slipped 1.33% to US$97.15 per tonne and copper futures dropped 5.41%. In response, BHP Group’s (ASX:BHP) ADRs fell 2.16% in offshore trading, suggesting potential headwinds for Australian miners.
In the US, preliminary data revealed the economy contracted by 0.3% in the March quarter—the first decline in three years—driven by rising imports ahead of possible tariff changes. Still, investors looked past recession fears after March's Personal Consumption Expenditures (PCE) index rose 0.7%, hinting at solid consumer demand. Microsoft (NASDAQ:MSFT) and Meta Platforms (NASDAQ:META) lifted sentiment further with strong earnings reports, while Super Micro Computer (NASDAQ:SMCI) and Snap (NYSE:SNAP) faced declines after disappointing results.
Back in Australia, small caps were relatively flat, with the S&P/ASX Small Ordinaries dipping 0.026% to 3,053.50. However, the index remains up 2.58% over the last five days—potentially promising for investors exploring ASX dividend stocks.
European markets posted moderate gains, helped by healthcare stocks, while Glencore’s (LSE:GLEN) 7.4% slide on weaker copper output capped broader advances. Meanwhile, oil and metal prices retreated sharply in April, highlighting ongoing caution amid soft Chinese data.
With the ASX200 having notched five straight gains, investors now await fresh cues from US jobless claims and PMI data, alongside key earnings from Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN).
