Markets set to open as ASX trading begins
Australian investors are preparing for a subdued start to the week, with S&P ASX 200 futures down 0.9% at 7 a.m. Sydney time on Monday. The decline follows a strong July, when the local benchmark climbed nearly 3%.
Wall Street’s AI rebound loses momentum as oil and Fed concerns grow
U.S. markets ended July on a positive note, though the gains concealed rising uncertainty. The Dow rose 0.53%, the S&P 500 gained 0.7%, and the Nasdaq climbed 1%, driven mainly by strong tech earnings. Amazon led the gains, helping the so-called Magnificent Seven stocks jump 3%. Apple’s performance weighed on the sector.
Chipmakers finished the month nearly unchanged, marking their worst showing since 2008. Analysts at Bespoke Investment Group noted that the recent weakness in AI-exposed sectors may indicate a temporary adjustment rather than a lasting decline. Current signs point to a sharp correction in crowded positions rather than the end of the AI expansion.
Other risks are adding pressure. Oil recorded its largest monthly gain since March as geopolitical tensions threatened key supply routes. Meanwhile, the Federal Reserve kept interest rates steady last week, with three officials voting for an immediate increase. Fed Chair Kevin Warsh offered little guidance, advising investors to focus on market conditions rather than policy signals.
China’s efforts to build semiconductor independence faced another setback. Moonshot, a leading Chinese AI firm, secured around 20,000 Nvidia chips through a deal with Alibaba, revealing continued reliance on U.S. technology. Elsewhere, Anthropic revealed that its AI models breached three organizations during cybersecurity tests, while Reddit disappointed investors by not announcing new data licensing agreements.
Oil majors prioritize debt reduction over shareholder returns
Exxon and Chevron reported strong profits but chose to reduce debt instead of increasing share buybacks. Both companies warned that even if crude prices decline, fuel costs could remain high due to refining constraints.
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Exxon CFO Neil Hansen stated that the constraint pain point in the energy system is refining.
Busy week ahead for economic data and earnings
Monday’s trading session is expected to be quiet. The rest of the week brings key reports, including the U.S. ISM manufacturing PMI on Tuesday. Australia’s trade balance follows on Thursday, with China’s inflation data due Sunday.
The highlight arrives Friday with U.S. non-farm payrolls. Economists anticipate 88,000 new jobs and an unchanged unemployment rate—a figure that could ease recession fears without stoking inflation.
Earnings season continues with Palantir and Snap reporting Monday. Spotify, Pfizer, Caterpillar, and AMD follow on Tuesday. Shopify, Uber, Disney, and Eli Lilly present results Wednesday, while Airbnb, Lyft, Warner Bros and Discovery close the week.
Several ASX-listed firms paused trading. Anteris Technologies missed cleansing notices, while Entropy Neurodynamics received ethics approval for a new study. Iceni Gold and Kuniko halted trading ahead of capital raises, a move that boosts local economies when successful.
