US markets takes a breather after strong rally

The US market's recent rally hit a snag overnight as stocks retreated, ending a winning streak.

The Dow Jones Industrial Average slipped 0.15 per cent to 40,834.97, while the S&P 500 and Nasdaq Composite declined by 0.2 per cent and 0.33 per cent, respectively.

This marked the first negative day for the Dow in six sessions and snapped eight-day winning streaks for the S&P 500 and Nasdaq. Had the S&P 500 held onto gains, it would have marked its longest winning streak since 2004.

Despite the pullback, market volatility has significantly decreased since the start of the month. The CBOE Volatility Index (VIX) is now below 16, a stark contrast to the peak of 65 reached on August 5th, when the S&P 500 suffered its worst day since 2022 amid a global market sell-off.

Turning to US sectors, most closed lower overnight. Energy was the biggest laggard by far, closing lower by 2.65 per cent. Consumer Staples, Health, Real Estate and Communication Services were the only sectors that closed higher overnight.

Strong retail sales and softer-than-expected inflation data have helped calm investor nerves. The S&P 500 and Nasdaq are both up over 1 per cent for the month, highlighting the market's rapid turnaround.

All eyes are now on the Federal Reserve's Jackson Hole Economic Symposium on Friday, where Chair Jerome Powell will deliver a speech. Before then, investors will scrutinise the minutes from the July policy meeting.

With the market pricing in a rate cut, the main question is whether the Fed will opt for a quarter-point or half-point reduction in September.

Turning to company news, Palo Alto Networks surged over 7 per cent after beating earnings estimates and announcing a $500 million stock buyback. Lowe's, on the other hand, fell more than 1 per cent due to weaker-than-expected revenue and a lowered profit outlook.

Beyond earnings, Bank of America slipped around 2.5 per cent amid reports of Berkshire Hathaway's reduced stake in the bank.

Shares of Netflix notched a record close on Tuesday, on the heels of upbeat advertising news. Shares ended 1.45 per cent higher, marking the the first record close since Nov 17 2021

Turning to commodities, China's copper exports plummeted 40 per cent in July from a record high in June due to domestic buyers capitalising on lower prices, with further declines expected as domestic demand strengthens.

Futures

The SPI futures are pointing to a 0.6 per cent fall.

Currency

One Australian dollar at 7.25am was buying 67.44 US cents.

Commodities

Gold has added 0.37 per cent. Silver has gained 0.74 per cent. Copper has lost 0.45 per cent. Oil has fallen 0.44 per cent.

Figures around the globe

European markets closed lower. London’s FTSE fell 1.0 per cent, Frankfurt lost 0.35 per cent, and Paris closed 0.22 per cent lower.

Turning to Asian markets, Tokyo’s Nikkei gained 1.80 per cent, Hong Kong’s Hang Seng lost 0.33 per cent, while China’s Shanghai Composite closed 0.93 per cent lower.

Yesterday, the Australian share market closed 0.22 per cent higher at 7997.73.

Ex-dividends
AMP Limited (ASX:AMP) is paying 2 cents 20 per cent franked
ASX Limited (ASX:ASX) is paying 106.8 cents fully franked
Commonwealth Bank (ASX:CBA) is paying 250 cents fully franked
GQG Partners (ASX:GQG) is paying 3.5423 cents unfranked

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