US markets moved higher on Monday as indexes recovered some of last week’s losses: the S&P 500 rose 0.6%, the Dow Jones Industrial Average gained 539 points and the Nasdaq was up 0.7% in midday trade.
Australian share futures pointed to a stronger open, indicating a possible rise of 70 points, or about 0.8%, after the ASX fell 0.6% on Monday. The Australian dollar was trading at US70.11¢ at 5.18am AEDT.
All eyes in Australia will be on the Reserve Bank announcement at 2.30pm AEDT, with markets broadly expecting the RBA to raise interest rates again. The decision is likely to set the tone for local banks, mortgage holders and the broader market.
Energy markets swung sharply, with Brent crude sliding 7.4% to US$105.03 a barrel. The fall follows ongoing volatility tied to uncertainty over when the conflict with Iran will allow global oil supply and shipping to return to normal.
Lower oil helped lift companies with large fuel bills: United Airlines climbed 6.5%, Southwest Airlines gained 4.4% and Carnival rose 5.5%, as cheaper fuel inputs would reduce operating costs for carriers and cruise operators.
Technology and artificial-intelligence related stocks remained uneven after a sharp sell-off last week. Alphabet recovered 1.3% on Monday after a more than 12% drop on Thursday, its worst day on record, while Nvidia rose 1.1% following a 4.2% slide on Friday.
Recent results from Big Tech have raised questions about whether heavy spending on AI infrastructure will produce sufficient returns: Alphabet reported slower-than-expected growth in its search business and reported weaker free cash flow for the quarter, concerns that prompted investor caution.
Several companies climbed after reporting stronger-than-expected profits. Marriott International rallied 4.7% after reporting global strength, with CEO Anthony Capuano saying:
“Trends improved meaningfully” from the spring.
Idexx Laboratories jumped 19.4% after beating forecasts for the quarter and raising full-year revenue and profit guidance.
Merger news weighed on some chips: Marvell Technology fell 7.3% after announcing a deal to buy Lumentum, offering 4.5 of its shares for each Lumentum share, a package that values Lumentum at about US$115 billion (A$164 billion). Lumentum’s shares slumped 12.8% on the announcement.
Apple was the single largest drag on the US market on Monday, falling 1.5% as investors awaited the company’s quarterly results due after the close. In Asia, markets were mixed but firm: South Korea’s Kospi jumped 2.2%, Shanghai gained 1.1% and Hong Kong rose 0.4%, where Chinese indexes are recovering from recent steep losses.
China’s central bank disclosed plans to deploy around 100 billion yuan under a new support program for markets, and Shanghai’s benchmark ended October more than 15% below its May peak. In the US, a stronger-than-expected manufacturing report and an ISM survey showing softer input-price pressures helped underpin investor sentiment and hopes for continued profit growth across several sectors.
