ASX eyes gains as Wall Street climbs; Oil swings

ASX gains in early trade after tech rally lifts Wall Street; Oil price eases Australian shares rose in early trading on Tuesday following a strong performance on Wall Street, driven by a surge in technology stocks. The S&P 500 gained 0.7 per cent, bringing it within 0.3 per cent of its all-time high recorded during the northern hemisphere's summer. The Nasdaq composite climbed 1.1 per cent to set a new record, while the Dow Jones Industrial Average rose 0.2 per cent. Futures indicated the Australian sharemarket would open higher, with a projected rise of 22 points, or 0.3 per cent. The Australian dollar strengthened to US69.69 cents against the US dollar. PTC saw the largest gain in the S&P 500, surging 33.5 per cent after Schneider Electric of France announced a $205-per-share acquisition offer, valuing the software firm at approximately $22.6 billion. This acquisition lifted broader software sector stocks, with Autodesk rising 5.6 per cent. RXO also posted a notable increase of 22.5 per cent after C.H. Robinson Worldwide agreed to acquire its truck brokerage business, offering $30.25 per share to RXO shareholders. In contrast, C.H. Robinson shares fell 12.1 per cent, marking the largest decline in the S&P 500. Market activity remained subdued outside these major deals as traders awaited the start of the fourth-quarter earnings season. Analysts expect S&P 500 companies to report nearly 30 per cent year-over-year profit growth for the period ending September, according to FactSet. If realized, this would mark the third consecutive quarter of growth exceeding 25 per cent for the index. Meanwhile, oil prices showed volatility due to uncertainty surrounding the impact of the ongoing conflict with Iran on global crude production. Brent crude traded between $100 and $103 per barrel in the morning, settling at $100.88, a drop of 1.3 per cent. Concerns over elevated oil prices contributed to a rise in the 10-year US Treasury yield, which reached 5.33 per cent, its highest level since 2002. High yields can dampen economic activity by increasing borrowing costs and reducing investor appetite for riskier assets. The US economy's resilience, bolstered by corporate investment in artificial intelligence infrastructure and sustained consumer spending, has supported the upward trend in yields. However, a recent report from the Institute for Supply Management revealed mixed signals regarding economic momentum. While service-sector activity expanded for the 27th consecutive month, the pace of growth fell short of expectations. Additionally, input prices for services firms increased at a faster rate, potentially signaling future inflationary pressures. Markets overseas reflected divergent performances. France’s CAC 40 dropped 0.8 per cent amid growing concerns about public debt and fiscal constraints. In contrast, Japanese markets showed signs of improvement, though specific details were not provided in the reports. The Federal Reserve is anticipated to raise its benchmark interest rate at least once before year-end, aiming to curb rapid inflation. The central bank had previously raised rates for the first time in three years last month. Investors remain attentive to developments in both domestic and international markets as they assess potential impacts on financial conditions and economic outlooks.