The ASX is poised for a lackluster beginning to the week as trading resumes later this morning. Wall Street's Thursday surge fizzled out on Friday, leaving investors with a sense of disappointment.
The ASX 200 futures market experienced a 42-point decline on Friday night, marking a surprising reversal compared to the solid 1.3% gain of 92 points in the local market on Friday. This gain had contributed to a weekly increase of 1.7%.
The upward momentum was largely attributed to the rise in iron ore prices, which surpassed $US120 a tonne for the first time since June, as well as a modest improvement in Chinese economic data for August. Additionally, the enthusiastic trading on Wall Street following the pricing and listing of chip maker Arm had a positive impact on the ASX sentiment.
A favorable jobs report for August on Thursday also boosted confidence in the ASX. However, on Friday, Wall Street investors once again became concerned about interest rates, inflation, and the upcoming meeting of the US Federal Reserve. These concerns were exacerbated by the European Central Bank's decision to raise its key rate on Thursday and the likelihood of the Bank of England following suit later in the week.
The initial excitement surrounding the successful re-listing of Arm on Thursday led to a 25% surge in its shares as various investors joined the trend. By Friday, profit-taking activities had burst the bubble, causing the shares to drop by 4.5%. Consequently, the S&P 500 experienced a loss for the day and recorded its second consecutive losing week.
On Friday, the benchmark index fell by 1.2%, marking its first loss in three days. The Dow also declined by 0.8%, while the Nasdaq composite slid by 1.6%.
In summary, the S&P 500 closed at 4,450.32 on Friday, losing 54.78 points, although it had still gained nearly 16% year-to-date. However, it's worth noting that the key index only managed a 0.92% gain in the last three months.
The Dow fell by 288.87 points to 34,618.24, and the Nasdaq, which heavily relies on technology stocks, slid by 217.72 points to 13,708.33.
For the week, the S&P 500 recorded a 0.2% decline of 7.17 points, the Dow saw a slight 0.1% rise of 41.65 points, and the Nasdaq had a 0.4% drop of 53.19 points.
