The Australian sharemarket closed higher on Thursday, marking a new record high, as the ASX 200 added 0.5 per cent to reach 8,974 points. This followed a slight rebound in Wall Street, where the S&P 500 fell 0.1 per cent and the Dow Jones Industrial Average dipped 0.7 per cent. Despite the modest decline on Wall Street, investor sentiment remained cautiously optimistic, driven by strong corporate earnings reports and ongoing speculation about potential geopolitical developments affecting global oil supplies. Major technology firms saw notable gains, with Warner Bros. Discovery rising 1.7 per cent after surpassing expectations in its quarterly earnings. Similarly, Molson Coors climbed 1.5 per cent due to positive financial outcomes. In contrast, some companies faced sharp declines, including Honeywell Aerospace, which plummeted 21.2 per cent after missing earnings targets, and AppLovin, which slid 18.4 per cent amid mixed results. These divergent performances underscored the volatility of the market, even as approximately 85 per cent of S&P 500 companies reported stronger-than-expected earnings, alleviating concerns about overvaluation. SpaceX shares increased 1.5 per cent as more than 911 million shares held by early investors and employees became available for sale following the expiration of a lockup period. This move significantly boosted liquidity in the stock, though the company’s valuation has fluctuated since its initial public offering. The stock reached a peak of $US225 per share shortly after its market debut in June but has since fallen below its initial offering price of $US135. As of Thursday, it was trading around $US110. Global oil prices continued to reflect heightened uncertainty surrounding the U.S.-Iran conflict, with Brent crude climbing 3.9 per cent to $US82.55 per barrel. Iran claimed it was nearing a deal with Oman to reopen the Strait of Hormuz, a critical maritime chokepoint for global oil transport. President Donald Trump had previously expressed optimism about a resolution, yet the situation has seen repeated interruptions over the past five months. With nearly a fifth of the world’s traded oil and natural gas passing through the strait, the conflict has contributed to elevated oil prices, reaching as high as $US113 during periods of tension. Inflation remains persistently above 3 per cent, with higher fuel and shipping costs continuing to weigh on both businesses and consumers. The U.S. economy grew at a sluggish 1.5 per cent pace in the second quarter, though household spending and job market resilience have provided some stability. However, concerns persist about the long-term implications of sustained inflation, particularly as higher energy prices push households to prioritize essential expenditures over discretionary spending. This shift could negatively impact industries reliant on non-essential consumption, such as travel and entertainment. Labor market indicators suggested a moderate slowdown in hiring activity, with the number of Americans seeking unemployment benefits increasing slightly. While layoffs remained within historically normal ranges, the data signaled a softening in employment growth. Analysts noted that while the labor market remains robust, signs of slowing momentum could influence future monetary policy decisions, especially as central banks grapple with balancing inflation control and economic growth. Meanwhile, the Australian dollar weakened to 70.35 US cents, reflecting broader market dynamics influenced by global economic conditions and currency interventions. The yen surged against the dollar, reaching a 40-year high of 155.20, as coordinated efforts by Japan and the U.S. to stabilize the currency intensified. Japanese officials and analysts warned that while these interventions could provide temporary relief, lasting improvements would require fundamental shifts in economic conditions. The Australian dollar, however, maintained a marginal advantage over the yen, remaining above 70 US cents.
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