US sharemarkets rallied overnight as investors returned to technology stocks, helped by easing oil prices and renewed optimism that heavy investment in artificial intelligence is translating into stronger earnings.
The Dow Jones Industrial Average climbed 693.38 points, or 1.32%, to a record close of 53,178.41. The S&P 500 gained 1.48% to 7,600.50, finishing within 21 points of its record high, while the Nasdaq Composite rose 2.13% to 25,913.90.
Technology and communication services led the advance. Meta Platforms surged 6%, Amazon rose more than 4% to push its market capitalisation above US$3 trillion for the first time, while Microsoft climbed nearly 5%. Nvidia gained almost 3% and Alphabet also finished close to 5% higher as investors regained confidence in the AI sector following a strong earnings season.
The rebound followed a difficult July for technology stocks, with investors increasingly convinced that large-scale spending on AI infrastructure is generating stronger earnings and supporting long-term growth.
Oil prices fell sharply after President Donald Trump cancelled planned military action against Iran and confirmed negotiations between the two countries would resume. Brent crude declined 4.7% to US$83.77 a barrel, while West Texas Intermediate fell 5.1% to US$80.34. Treasury yields also eased as lower energy prices reduced immediate inflation concerns.
Australian Market Outlook
Australian shares are expected to open little changed despite the strong lead from Wall Street, with local futures indicating a subdued start to trading.
S&P/ASX 200 futures are flat at 8,970.
Locally, investors will be watching June household spending and ANZ-Indeed July job advertisements, both due at 11:30am AEST. Reporting season also continues with results from Credit Corp and Charter Hall Social Infrastructure. Overnight, attention will turn to US June trade data and job openings, providing further insight into the strength of the world’s largest economy.
