Markets Overview

  • ASX SPI 200 futures up 0.5% to 8,840.00
  • S&P 500 up 0.5% to 6,631.96
  • Dow Average up 0.3% to 46,142.42
  • Aussie down 0.6% to 0.6612 per US$
  • US 10-year yield rose 1.8bps to 4.1044%
  • Australia 3-year bond yield fell 3.4 bps to 3.38%
  • Australia 10-year bond yield fell 2.9 bps to 4.19%
  • Gold spot down 0.4% to $3,644.32
  • Brent futures down 0.6% to $67.51/bbl

Economic Events

  • 11:00: (AU) Australia to Sell A$1 Billion 1% 2030 Bonds

RBA’s model of the neutral cash rate implies a “significant downward revision” to its estimates while the job market is seen as tighter than previously thought, according to internal documents released under a Freedom of Information Act request.

Asian stocks were primed for early gains Friday after US and global equity gauges hit fresh highs as easing policy supported bullish sentiment.

Equity index futures for Japan, Australia and Hong Kong advanced, in a sign of robust risk appetite. The S&P 500, Nasdaq 100, Dow Jones Industrial Average and Russell 2000 small-cap index all closed together at fresh highs for the first time since November 2021. An MSCI index of global stocks also closed at a record.

US equity gains were helped along by a strong day for tech stocks. A $5 billion investment from Nvidia Corp in Intel Corp drove the ailing chipmaker up 23%. FedEx Corp, meanwhile, reinstated its full-year profit outlook, leading its shares to rally in after-hours trading Thursday.

The upbeat mood reflected expectations for further Federal Reserve rate cuts alongside an economy and jobs market that for now remains relatively resilient. Thursday data showed jobless claims dropped by the most in nearly four years, suggesting US companies are still holding onto workers.

“The Fed is cutting interest rates during a time when stocks are at record highs and the economy is still growing,” said Robert Schein at Blanke Schein Wealth Management. “This dynamic is bullish for stocks.”

Treasuries sold off slightly across the curve Thursday. The US 10-year yield rose two basis points, supporting an index of the dollar, which ended the session higher for a second day.

The yen was steady after weakening against the greenback Thursday, ahead of inflation data and a Bank of Japan interest rate decision due Friday. Economists polled by Bloomberg anticipate Japan’s central bank will leave its target interest rate unchanged at 0.5%. BOJ watchers will be looking for clues as to the likelihood of a move next month or in December.

Elsewhere in Asia, data for release includes trade for Malaysia and a China FX net settlement figures.

In corporate news, Hyundai Motor Co. raised its revenue forecast for 2025 while paring profit expectations as the South Korean automaker accelerates investment in the US to mitigate tariff costs. India’s securities market regulator cleared the Adani Group and its billionaire founder Gautam Adani of some allegations of impropriety.

Worries have been mounting for weeks that the S&P 500’s push to record after record risks becoming a bubble, with the index’s swollen valuation cited most often as cause for concern.

Critics point to the tech sector’s outsize influence on this year’s gain, with just five stocks, all megacap tech firms, driving about half of the advance. But a closer look shows tech giants have largely justified their elevated valuations with profit growth.

“Investors have happily bought every dip, largely thanks to AI-driven enthusiasm and consistently strong results from big tech,” said Fawad Razaqzada at City Index and Forex.com. “The concern is that if tech momentum cools, the rest of the market may struggle to justify current valuations.”

That leaves the rally vulnerable if investor confidence wavers, putting the S&P 500 forecast on a more cautious stance, he noted.

“Our base case remains that the US economy will remain resilient and that it is unlikely to spiral into a recession,” said David Lefkowitz at UBS Global Wealth Management. “We therefore believe stocks are poised for further gains.”

In commodities, gold fell for a second session Thursday, as did West Texas Intermediate, the US oil price. Declines for crude came as US President Donald Trump implied that he favored low prices over sanctions as a means of pressuring Russia to end its war in Ukraine.