Dow soars to new heights amid rate cut hopes

The Dow Jones Industrial Average notched a new all-time high overnight as investors sought to shake off a recent market slump.

The 30-stock index finished the session up 65.44 points, or 0.16 per cent, to close at 41,240.52. Earlier in the day, it touched a new intraday record, but pulled back from that peak. Meanwhile, the S&P 500 retreated 0.32 per cent to 5,616.84, and the Nasdaq Composite dipped 0.85 per cent to 17,725.76.

US sector performance was mixed, as traders shifted their focus away from technology stocks and into other market segments. The S&P 500 energy sector gained more than 1 per cent, while technology stocks fell by 1 per cent.

Nvidia's shares declined 2.3 per cent ahead of its earnings report, scheduled for Wednesday afternoon. Investors are closely watching this event, as it could significantly impact both the market and the artificial intelligence-driven bull run. Other chip stocks, such as Broadcom and Micron, also experienced declines.

Apple has scheduled an event on September 9th to unveil its new iPhone and Apple Watch models. The highly anticipated iPhone models are expected to feature larger screens, improved cameras, and support for Apple Intelligence. The event will be live-streamed online.

The positive market sentiment follows a strong week, buoyed by comments from Federal Reserve Chair Jerome Powell that hinted at potential interest rate cuts. Wall Street has been eagerly anticipating a rate reduction, particularly in light of recent economic data that sparked a sell-off in early August and raised concerns about the impact of higher borrowing costs on the U.S. economy.

While Powell did not specify the timing or magnitude of a potential rate cut, traders are overwhelmingly expecting a reduction at the Fed's September policy meeting, according to the CME Group's FedWatch Tool.

Turning to commodities, the International Copper Study Group (ICSG) reports a preliminary surplus of 488,000 tonnes in the global refined copper balance for the first half of 2024, primarily due to increased supply and moderate demand growth. Despite uneven regional demand, the global apparent refined copper usage rose by approximately 3.3 per cent during this period.

Oil prices surged to their highest level in nearly two weeks on Monday, driven by reports of a shutdown in Libyan production due to political disputes. The news, coupled with heightened tensions in the Middle East, pushed Brent crude up 2.5 per cent to $80.97 and West Texas Intermediate up almost 3 per cent to $77.04.

Futures

The SPI futures are pointing to a 0.1 per cent gain.

Currency

One Australian dollar at 7:30am was buying 67.70 US cents.

Commodities

Gold added 0.35 per cent. Silver gained 0.65 per cent. Copper rose 0.85 per cent. Oil gained 3.46 per cent.

Figures around the globe

European markets closed mixed. London’s FTSE was closed, Frankfurt lost 0.09 per cent, and Paris closed 0.18 per cent higher.

Turning to Asian markets, Tokyo’s Nikkei lost 0.66 per cent, Hong Kong’s Hang Seng gained 1.06 per cent, while China’s Shanghai Composite closed 0.04 per cent higher.

Yesterday, the Australian share market closed 0.76 per cent higher at 8084.52.

Ex-dividends
AGL Energy Limited (ASX:AGL) is paying 35 cents unfranked
BSP Financial Group (ASX:BFL) is paying 14.5733 cents unfranked
Contact Energy Ltd (ASX:CEN) is paying 20.612 cents unfranked
Coronado Global Res (ASX:CRN) is paying 0.5376 cents fully franked
Deterra (ASX:DRR) is paying 14.4 cents fully franked
ECP Emerging Growth (ASX:ECP) is paying 3.1 cents fully franked
HMC Capital Limited (ASX:HMC) is paying 6 cents 70 per cent franked
Humm Group Limited (ASX:HUM) is paying 1.25 cents fully franked
IPH Limited (ASX:IPH) is paying 19 cents 30 per cent franked
MA Financial Group (ASX:MAF) is paying 6 cents fully franked
Redox Limited (ASX:RDX) is paying 6.5 cents fully franked

Dividends payable
Metcash Ltd (ASX:MTS)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap, Marketech.
Disclaimer

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