Powell signals potential for tighter policies: ASX to open lower

The S&P 500 was little changed Wednesday as traders pored over the latest commentary on the pace of future monetary policy from Federal Reserve Chair Jerome Powell.

Powell spoke before a panel with Bank of England Governor Andrew Bailey, European Central Bank President Christine Lagarde and Bank of Japan Governor Kazuo Ueda at the ECB Forum on Central Banking in Sintra, Portugal.

Powell said more restrictive policy is still to come as the Fed continues to fight inflation, including the likelihood of interest rate hikes at consecutive meetings.

Overall in the US markets, the Dow Jones Industrial Average fell 74.08 points, or 0.22 per cent, to 33,852.66. The S&P 500 was lower by 0.04 per cent at 4,376.86. Meanwhile, the Nasdaq Composite rose 0.27 per cent.

Artificial intelligence beneficiary Nvidia dropped by more than 1 per cent and the iShares Semiconductor ETF (SOXX) also declined, after reports came out that the US is considering imposing additional restrictions on the export of AI chips to China, similar to the restrictions imposed last fall.

Google-parent Alphabet rose more than 1 per cent, while Tesla jumped more than 2 per cent. Netflix shares gained more than 3 per cent.

Investors are preparing to close out the best first half for the Nasdaq in 40 years, as they ride a wave of optimism around artificial intelligence that has significantly buoyed a handful of mega-cap tech stocks. The S&P 500 and Nasdaq Composite are higher this year by 14 per cent and nearly 30 per cent, respectively.

Overall, US sectors closed mostly mixed. Energy was the best performer, whilst Utilities was the worst.

On the Aussie front, BlackRock raises $500 million from various institutions to build the Waratah Super Battery in NSW, with the aim of stabilising the grid as coal power declines, while other companies also plan big battery projects in Australia.

Futures

The SPI futures are pointing to a 0.07 per cent fall.

Currency

One Australian dollar at 7:30 AM was buying 66.05 US cents.

Commodities

Gold has lost 0.08 per cent. Silver has lost 0.28 per cent. Copper has lost 1.21 per cent. Oil has gained 2.75 per cent.

Figures around the globe

Across the Atlantic, European markets closed lower yesterday. London’s FTSE fell 1.66 per cent, Frankfurt lost 0.22 per cent, while Paris closed 0.45 per cent lower.

Turning to Asian markets, Tokyo’s Nikkei gained 2.02 per cent, Hong Kong’s Hang Seng gained 0.12 per cent and China’s Shanghai Composite closed flat.

Yesterday, the Australian sharemarket closed 1.1 per cent higher at 7,196.54.

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

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