ASX set to edge up, Wall Street gets inflation boost; CBA results ahead
The S&P 500 rose 1.1 per cent and was on track to top its all-time high set two weeks ago. The Dow Jones was up 473 points, or 1.1 per cent, while the Nasdaq composite was 1.3 per cent higher and also heading toward a record.
The Australian sharemarket is set to edge higher, with futures at 4.56am AEST pointing to a gain of 13 points, or 0.2 per cent, at the open. The ASX added 0.4 per cent on Tuesday as the RBA cut interest rates. The Commonwealth Bank's latest results is the highlight for reporting season on Wednesday. The Australian dollar was stronger at US65.28¢ at 5.18am AEST.
US stocks got a lift from hopes that the better-than-expected inflation report will give the Federal Reserve leeway to cut interest rates at its next meeting in September.
Lower rates would give a boost to investment prices and to the economy by making it cheaper for US households and businesses to borrow to buy houses, cars or equipment. President Donald Trump has angrily been calling for cuts to help the economy, often insulting the Fed's chair personally while doing so.
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But the Fed has been hesitant because of the possibility that Trump's tariffs could make inflation much worse. Lowering rates would give inflation more fuel, potentially adding oxygen to a growing fire. That's why Fed officials have said they wanted to see more data come in about inflation before moving.
Tuesday's report said US consumers paid prices for groceries, petrol and other costs of living that were 2.7 per cent higher in July than a year earlier. That's the same inflation rate as June's, and it was below the 2.8 per cent that economists expected.
The report pushed traders on Wall Street to increase bets that the Fed will cut interest rates for the first time this year in September. They're betting on a 94 per cent chance of that, up from nearly 86 per cent a day earlier, according to data from CME Group.
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