ASX 200 Set to Open at Fresh Highs
The ASX 200 is expected to push into record territory after futures rose 24 points or 0.27% at 8:30 am AEST. Ten of eleven major US sectors finished higher overnight, with gains in Energy, Discretionary, Health Care, and Telcos. Investors closely tracked company earnings, commodity shifts and early economic indicators driving broader sentiment upward.
NextDC and Metcash Lead Local Movers
NextDC surged 5.1% following its Malaysian contract utilisation update, suggesting ongoing demand for data services in Asia. Metcash lifted 3.5% after raising its FY25 guidance slightly above consensus expectations, prompting likely analyst upgrades. The guidance could trigger upward revisions in earnings forecasts and target prices for the wholesale giant.
S&P 500, Nasdaq Near All-Time Highs
The S&P 500 and Nasdaq closed within 2.3% of their all-time highs after a broadly positive US session. Market focus remained fixed on trade talks between the US and China, and key economic data due this week. The S&P 500 advanced as institutional investors grew confident and increased their exposure to equities.
US-China Trade Talks Continue in London
Trade discussions between US and Chinese officials entered their second evening in London with limited public detail. A third day of talks remains possible as both sides weigh issues including export controls and visa restrictions. The US also concluded four days of talks with India, with an interim deal expected by month-end.
Gold and Uranium ETFs Fall Back
Uranium and gold sectors retreated after recent gains, with ETFs down 3.2% and 1.3% respectively overnight. The pullback reflected investor rotation into equities and profit-taking from commodities ahead of CPI data.
Key US Corporate Developments
IBM announced plans for large-scale quantum computers with a new processor architecture to lead the innovation drive. Apple launched a redesigned OS, unveiled a new Mac OS and updates to Apple Intelligence for developers. Nvidia and Hewlett Packard revealed plans to build the Blue Lion supercomputer, due in 2027. OpenAI reported annual recurring revenue growth from $5.5bn to $10bn due to strong ChatGPT demand. Novo Nordisk shares hit a two-month high after Parvus Asset Management reportedly acquired a stake. TSMC’s May revenue soared 40% on strong AI chip demand and inventory build-up amid trade tensions.
Central Bank Updates Across Regions
BOJ Governor Ueda said the bank would tighten if confidence in inflation targeting improved, though his tone remained dovish. Fed is expected to hold rates in June, with a cut unlikely before September, according to Reuters. Bessent was reportedly considered for Fed chair, but the White House denied any selection process. The Bank of Mexico may cut its rate by 50 basis points despite ongoing inflation risks.
Also Read: Three Undiscovered ASX Stocks with Strong Earnings and Growth Potential
Geopolitical and Tariff Moves Reshape Market Risks
The US threatened new trade weapons including visa controls and restrictions on goods like ethane and jet engines. China’s curbs on rare earth exports raised alarm across auto and defence sectors fearing long-term supply risks. A federal appeals court moved closer to a decision on pausing a ruling against Trump-era tariffs. Trump expressed concern over Iran’s potential uranium enrichment in upcoming nuclear discussions.
Economic Indicators Signal Mixed Outlook
China allocated a 10.9 trillion yuan fund to boost housing, aiming to provide alternatives to traditional bank mortgages. UK retail sales slowed in May as households faced mounting bills and higher prices. Eurozone investor sentiment rose in June, with Germany’s index reaching its highest level since March 2022. Japan may enter a slight technical recession in the first half of 2025 due to weak growth data. Australia’s consumer sentiment rose marginally, described as “cautious pessimism” in the current macroeconomic climate. World Bank cut its 2025 global growth forecast to 2.3% from 2.7%, citing trade tensions as a major drag.
Investor Sentiment Remains Cautiously Optimistic
Global equities gained momentum while commodity sectors saw rotation, highlighting investors’ evolving risk appetite. Despite limited details on trade talks, optimism remained supported by earnings beats and rising tech demand. ASX traders are expected to follow the US market’s lead, driving momentum towards record levels today.
