ASX rises on back of mining, energy stocks; Bullock gets RBA nod

The gains come on the back of a strong performance on Wall Street amid hopes that inflation is finally starting to cool in the US.

The S&P 500 rose by 0.8 per cent to its highest close since April 2022. The Dow Jones added 0.1 per cent and the Nasdaq composite rallied by 1.6 per cent, to 14,138.57 as Big Tech stocks led the way.

The Australian dollar continued to march higher. It was 1.5 per cent higher at 68.89 US cents at 6.50am AEST.

High inflation has been the main reason investors have been fearing a possible recession, because of how high the Federal Reserve has cranked interest rates to get prices under control. High rates undercut inflation by bluntly slowing the entire economy and hurting prices for investments. They can also cause unanticipated parts of the economy to break.

Traders remain nearly convinced the Fed will raise the federal funds rate at its next meeting in two weeks to its highest level since 2001. But this week’s inflation data has also pushed traders to build bets for that to be the final rate increase of this cycle.

Treasury yields fell further in the bond market as traders pared bets for Fed rate hikes later this year.

The drop for yields accelerated after James Bullard said in the afternoon that he’s stepping down as president of the St. Louis Federal Reserve Bank to join Purdue University’s business school as its dean next month. He was one of the loudest voices at the Fed pushing for higher rates to control inflation.

That had Amazon, Alphabet and Nvidia among the strongest forces pushing up the S&P 500. Amazon gained 2.7 per cent after it said the first day of its annual Prime Day event on Tuesday was the biggest sales day in its history.

Alphabet rose 4.7 per cent after Google said it’s rolling out Bard, its chatbot powered by artificial intelligence, to more countries around the world and launching new features for it.

Nvidia, which has been at the centre of a frenzy on Wall Street around AI, rose 4.7 per cent.

The earnings reporting season is just getting underway, and JPMorgan Chase will lead a barrage of banks on Friday that will tell investors how much they made during the spring. Expectations overall are dim, and analysts are forecasting the sharpest drop in earnings for S&P 500 companies since the pandemic was walloping the global economy in the spring of 2020.

On the losing side of Wall Street Thursday was Exxon Mobil. It fell 1.8 per cent after saying it would buy Denbury, which owns carbon dioxide pipelines, for $US4.9 billion ($7.1 billion) in stock. Denbury fell 1.3 per cent.

With AP