ASX eyes gains as Wall Street climbs; Oil swings

ASX gained in early trade on Tuesday following a tech-driven rally on Wall Street, although oil prices eased slightly. US equity markets closed higher after several acquisition announcements boosted investor sentiment, while concerns over global oil supply remained unresolved. The S&P 500 increased by 0.7 per cent, bringing it within 0.3 per cent of its all-time high recorded during the northern hemisphere's summer. The Dow Jones Industrial Average rose 0.2 per cent, and the Nasdaq Composite surged 1.1 per cent to establish a new record. Futures contracts indicated the Australian share market would open higher, with a projected rise of 22 points, or 0.3 per cent, at the opening. The ASX had closed flat on Monday, and the Australian dollar strengthened to US69.69 cents against the US dollar. PTC saw the sharpest increase among S&P 500 components, surging 33.5 per cent after French firm Schneider Electric announced a cash acquisition offer of $205 per share, valuing the company at approximately $22.6 billion. This acquisition lifted shares in the broader software sector, with Autodesk rising 5.6 per cent. RXO also posted a notable gain of 22.5 per cent following news that C.H. Robinson Worldwide would acquire its truck brokerage operations, offering $30.25 per share to RXO shareholders. In contrast, C.H. Robinson shares declined 12.1 per cent, marking the largest drop in the S&P 500. Market activity remained subdued as traders awaited the start of the quarterly earnings season. Analysts anticipate robust earnings growth for S&P 500 firms, projecting nearly 30 per cent year-over-year profit growth for the period ending in September. According to FactSet, this would mark the third consecutive quarter of growth exceeding 25 per cent for the index. Despite ongoing economic uncertainties, these forecasts have supported the recent stock market rally toward record levels. Oil prices showed volatility due to lingering concerns regarding the impact of the conflict with Iran on global crude production. Brent crude traded between $100 and $103 per barrel in the morning session before settling at $100.88, a decline of 1.3 per cent. Elevated oil prices contributed to rising bond yields, with the 10-year US Treasury yield climbing to 5.33 per cent from 5.28 per cent on Friday. This marks the highest level since 2002. Higher yields can hinder economic growth by increasing borrowing costs and reducing investor appetite for equities. The US economy's resilience, driven by substantial corporate investment in artificial intelligence infrastructure and sustained consumer spending, has further pressured yields upward. However, a recent report from the Institute for Supply Management revealed mixed signals about economic health, noting that service sector expansion slowed below expectations in September, despite extending to a 27-month streak. Additionally, the pace of price increases for goods and services purchased by service providers accelerated, potentially signaling future inflationary pressures. Analysts expect the Federal Reserve to raise its benchmark interest rate at least once before year-end to manage inflationary trends. The central bank had previously increased rates for the first time in three years last month. Globally, European markets faced headwinds, with France's CAC 40 declining 0.8 per cent amid growing concerns over public debt and fiscal constraints. Meanwhile, Japanese markets showed signs of improvement.