US sharemarkets edged lower on Monday as investors assessed the outlook for the Iran war and looked ahead to key inflation data that could shape expectations for Federal Reserve interest rates.
The S&P 500 slipped 0.06% to 7,753.11, while the Nasdaq Composite fell 0.32% to 26,605.36. The Dow Jones Industrial Average declined 60.95 points, or 0.11%, to 53,975.98.
Technology stocks were among the main drags. Intel fell 4% after announcing plans to offer US$15 billion in common stock, while Nvidia dropped 2.9% and Apple declined 1.5%.
Investors also continued to monitor developments in the Iran war. Iran has indicated it is moving closer to an agreement with Oman to reopen the Strait of Hormuz, although Tehran continues to resist direct negotiations with the US until several conditions are met. The uncertainty comes after expectations of an imminent agreement increased last week before President Donald Trump said the US was only “semi-negotiating” with Iran.
The modest declines followed Wall Street’s strongest week since April, with the S&P 500 finishing last week at a record high. Sentiment was supported by Friday’s weaker-than-expected US employment report, which reduced expectations for further interest rate increases.
Markets are now pricing an almost 52% chance of a Federal Reserve rate increase in September, down from 67% a week earlier. Attention turns to Wednesday’s July consumer price report for further clues on the path for monetary policy.
Australian Market Outlook
Australian shares are expected to open largely flat ahead of today’s Reserve Bank of Australia policy decision.
S&P/ASX 200 futures are down 3 points at 9,178.
The RBA takes centre stage, with its policy decision and Statement on Monetary Policy due at 2.30pm AEST, followed by a press conference at 3.30pm. Investors will be watching closely for any change in the Bank’s assessment of inflation and the outlook for interest rates.
Before the RBA decision, NAB’s July business confidence and conditions data will be released at 10.30am.
The August reporting season also continues, with Life360, Coronado Global Resources, Helia and SGH scheduled to report today. Offshore, attention remains on the Iran war and oil prices ahead of Wednesday’s US inflation report.
