ASX Set to Rise as Wall Street Eyes Fed Rate Cut

On Friday, Amazon led the way as US stock indexes closed higher, reflecting a positive market reaction despite a surprisingly weak jobs report. The report, which was impacted by unusual factors, reinforced expectations on Wall Street for another cut in interest rates by the Federal Reserve this week.

Market Performance

The S&P 500 rose by 0.4 percent, recovering from a previous decline that marked its worst performance in eight weeks. The Dow Jones Industrial Average gained 288 points, or 0.7 percent, while the Nasdaq composite saw an increase of 0.8 percent. In Australia, the share market is also expected to open higher, with futures indicating a gain of 36 points, or 0.4 percent.

Amazon's Impact

Amazon's shares climbed by 6.2 percent after the company reported better-than-expected profits for the recent quarter, which significantly contributed to the rise of the S&P 500. Additionally, Intel saw a 7.8 percent increase despite reporting a larger-than-expected loss; however, it exceeded revenue forecasts and provided an optimistic outlook for the current quarter. Cardinal Health also made strong gains, rising by 7 percent after surpassing earnings and revenue expectations and raising its profit projections for the fiscal year.

Tech Sector Variation

While Amazon, Intel, and Cardinal Health boosted the market, Apple faced headwinds with a 1.2 percent decline. The tech giant indicated that its expected revenue growth for the critical holiday quarter would be in the low to mid-single-digit range, falling short of analyst forecasts.

Labor Market Insights

The overall job market showed signs of weakness as the latest report indicated that US employers added only 12,000 jobs last month, significantly below the anticipated 115,000. Economists expect the Federal Reserve to cut its main interest rate by a quarter percentage point this week, following their previous decision to reduce rates in September. The weaker jobs data eliminated any remaining hopes that the Fed might keep rates stable.

Economic Outlook

Despite the challenges highlighted by the jobs report, many analysts believe the economy can avoid entering into a recession, supported by the anticipated rate cuts. Although there are signs of a slowdown in the job market, the broader economy has been more resilient than previously feared. A separate report also indicated that US manufacturing contracted at a rate quicker than expected, illustrating the ongoing impact of recent high-interest rates.

International Markets and Commodities

On a global scale, markets saw gains across much of Europe, while Asian indexes closed mostly lower aside from Hong Kong. Oil prices increased slightly, with benchmark US crude rising by 0.4 percent, helping to offset some of the losses experienced earlier in the week.

stocks, interest, economy