ASX set to rise following US stocks record highs
Staff writers
The Australian share market is heading for a stronger morning after US stocks rose for a third session overnight, pushing the S&P 500 and Dow Jones to new record highs.
ASX futures rose 41 points, or 0.5 per cent, to 8701, suggesting the market will gain once trading resumes. The S&P/ASX 200 fell 0.5 per cent on Tuesday despite BlueScope Steel rising after investors pulled out of the big four banks and confirmed the steelmaker had received a $13 billion takeover offer. The Australian dollar was up 0.4 per cent at 67.40¢ as of 07.53 AEDT.
Investors will look to the latest inflation figures at 11.30am AEDT for clues on where interest rates will go next. Economists estimate that consumer prices rose 3.7 percent in November, a slight slowdown from the 3.8 percent inflation rate in October, according to Trading Economics. A higher reading could fuel speculation that the Federal Reserve could raise interest rates as early as next month.
Overnight on Wall Street, U.S. stocks continued their gains for the first full trading week of the year, led by advances in the materials, industrials and financial sectors as the market’s return to laggards accelerated and catapulted the market toward all-time highs.
S&P 500 Index broke a new record with an increase of 0.6 percent. While the Nasdaq 100 Index rose 0.7 percent, the old economy Dow Jones Industrial Average rose 1 percent and closed above the 49,000 level for the first time.
“If there’s one theme, it’s rotation,” said Michael O’Rourke, chief market strategist at Jonestrading Institutional Services. “Overall, people are looking to invest in this market, but they are also looking for other industry groups that represent relative value compared to last year’s leaders and high flyers.”
But big tech companies were still making some of the most notable moves. The gains mirrored much of the action in 2025, when tech giants often drove the market to a series of records.
Amazon, which operates in both retail and technology, increased by 3.4 percent. It’s one of the world’s most valuable companies, and its outsized stock valuation helped offset losses elsewhere in the market, including Apple’s 1.8 percent loss.
Micron Technology also helped lift the market, collecting 10 cents.
Nvidia, usually the biggest force behind the market’s direction, hesitated throughout the day and closed down 0.5 percent.
Digital storage device maker Sandisk achieved the biggest gain in the US market with a 27.6 percent increase. The stock’s value has risen more than 800 percent since it was spun off from Western Digital last February. The gains were driven by artificial intelligence and the resulting demand for data storage hardware.
Technology companies, especially those focused on artificial intelligence, are being closely watched this week at the industry’s annual CES trade show in Las Vegas.
AI advances have helped the broader market reach a number of records in 2025. Investors will be watching companies for any updates that could shed more light on major corporate investments in AI technology.
The price of benchmark US crude oil fell 1.4 percent, reversing sharp rises a day earlier as the market reacted to US forces capturing Venezuelan President Nicolás Maduro in a weekend raid.
Treasury yields rose in the bond market. The yield on the 10-year Treasury note rose to 4.18 percent from 4.15 percent late Monday. The yield on the two-year Treasury note, which moves closer to expectations of what the Fed will do, rose to 3.48 percent from 3.45 percent late Monday.
Gold prices increased by 1 percent and silver prices increased by 5.7 percent. Such assets are often considered safe havens in times of geopolitical turmoil. Metals reached record prices last year in an environment where economic concerns caused by conflicts and trade wars continue.
Markets in Europe and Asia gained strength.
Apart from company announcements, Wall Street is also bracing for various updates on the US labor market this week, as well as reports on the services sector and consumer sentiment. They will help paint a clearer picture of how vital parts of the world’s largest economy fare in 2025 and the direction they might take in 2026. The reports will be monitored by the Federal Reserve when determining interest rate policy.
The central bank’s biggest focus will be reports on the U.S. labor market in the coming days, including updates on job openings and overall employment. The Fed weighs the slowing employment market against rising inflation risks when deciding whether to cut interest rates. It cut its benchmark interest rate three times in late 2025, but inflation remained above its 2 percent target, making the Fed more cautious.
Wall Street expects the Fed to keep interest rates steady at its January meeting.
With AP and Bloomberg
