Australian shares are set to open higher. US stocks were lower as oil prices rallied and the yield on the US 10-year note edged still higher.
A Fed decision on interest rates is set for 2pm Wednesday (4am Thursday AEST). The probability of a quarter of one percentage point rate increase stands at 92.3 per cent. The yield on the 10-year US note rose to as high as 5.04 per cent – it closed up 1 basis point to 5 per cent.
ASX 200 futures were up 31 points or 0.4 per cent to 8691 near 7am AEST. The S&P 500 was 0.5 per cent lower in New York, with consumer discretionary leading losses in nine of the 11 industry sectors.
“While we are less hawkish than consensus on the Fed hiking tomorrow (we put odds at 50-50), [chairman Kevin] Warsh is a wildcard given the Fed’s newfound lack of forward guidance,” Wolfe Research’s Chris Senyek said in a note. “If the Fed follows the futures market and hikes rates, our sense is that stocks are likely to see downward pressure over the near-term, based on price action following the first rate hike in prior cycles.”
“However, we’ve found that over a longer time horizon (six to 12 months after the first rate hike), stocks typically recover and push into positive territory. Despite potential equity market weakness, we do not believe that this will mark a ‘top’ for markets. Rather, our sense is that the technology sector can continue to work, given tailwinds from AI megatrends, very strong earnings results, and a resilient US economy.”
Source: https://www.afr.com/markets/equity-markets/asx-to-rise-us-equities-lower-as-us-10-year-tops-5pc-20260916-p60xos