US sharemarkets rallied overnight, with the S&P 500 and Dow Jones Industrial Average both closing at record highs as strong corporate earnings, a rebound in semiconductor stocks and falling oil prices boosted investor confidence.
The Dow Jones Industrial Average climbed 907.47 points, or 1.71%, to a record close of 54,085.88. The S&P 500 rose 1.79% to a fresh record of 7,736.52, while the Nasdaq Composite jumped 2.59% to 26,584.99.
Technology stocks led the gains, with the sector rising more than 4% as semiconductor shares extended their recovery following July’s sell-off. The Philadelphia Semiconductor Index rallied 6.6%, with Marvell Technology climbing 12.8%, Arm Holdings up 17.4% and Micron Technology gaining more than 7%. Palantir soared almost 30% after posting stronger-than-expected quarterly results, while Caterpillar rose more than 5% after beating earnings forecasts and lifting its revenue outlook.
Investor sentiment also improved after comments from US Treasury Secretary Scott Bessent suggested progress was being made towards reopening the Strait of Hormuz. Oil prices fell sharply, with Brent crude dropping more than 5% to around US$79 a barrel and West Texas Intermediate falling nearly 6% to about US$76 a barrel, easing concerns over inflation and energy supply disruptions.
Australian Market Outlook
Australian shares are set to open higher, following record closes on Wall Street as strong earnings and easing geopolitical tensions lifted global risk appetite.
S&P/ASX 200 futures are up 41 points, or 0.5%, to 9,131.
Investors will watch New Zealand’s second-quarter employment data this morning, alongside Japan’s wage figures and China’s services PMI. Later today, services PMI readings are due from Japan, the UK and Europe, before attention turns to the US ADP private employment report, which will provide another update on labour market conditions ahead of Friday’s payrolls release.
