Australia

Australian shares are set to edge lower following a dip on Wall Street.

ASX futures were down 49 points or 0.7% at 6794 as of 7:00am on Friday, pointing to a slip at the open.

US stocks dropped Thursday, with investors mulling how this week's inflation report likely cements the US Federal Reserve's path to continue raising interest rates aggressively.

The S&P 500 fell 44.66 points, or 1.1%, to 3901.35 after data showed a strong economy that could encourage the Fed to keep raising interest rates at a rapid pace. The tech-focused Nasdaq Composite dropped 167.32 points, or 1.4%, to 11552.36. The Dow Jones Industrial Average fell 173.27 points, or 0.6%, to 30961.82.

The market is going to be choppy between now and the Fed meeting next week, said Ava Trade analyst Naeem Aslam. Mixed economic data and stubbornly high inflation make the Fed's job harder, though he said that talk of a full percentage-point interest-rate raise is likely overdone. But another raise of 0.75 percentage point is probable -- much to the market's chagrin.

In commodity markets, Brent crude oil slipped 3.55% to $US90.76 a barrel, gold edged down 1.97% to US$1,663.93.

In local bond markets, the yield on Australian 2 Year government bonds rose to 3.09% while the 10 Year edged up to 3.68%. Overseas, the yield on 2 Year US Treasury notes rose to 3.86% and the yield on the 10 Year US Treasury notes was up to 3.45%.

The Australian dollar hit 66.98 US cents down from the previous close of 67.45. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies edged up to 101.62.

Asia

China stocks ended lower, extending the previous day's losses amid cross-sector weakness. The benchmark Shanghai Composite Index fell 1.2% to settle at 3199.92, while the Shenzhen Composite Index lost 2.3% to 2051.79. The tech-heavy ChiNext Price Index suffered the steepest drop, declining 3.2% to settle at 2424.19. A mixed bag of sectors, including electronic component makers, metal producers and plastics suppliers, weighed on the market. But the bigger losses were concentrated in growth sectors, such as new-energy equipment makers and electric-car battery companies, as investor worries continued over more aggressive interest rate increases by the US Fed.

Hong Kong stocks ended the session slightly higher, as the market picked up from an earlier global equities selloff triggered by faster-than-expected U.S. inflation. The benchmark Hang Seng Index edged up 0.4% to settle at 18930.38. Chinese property developers led the gains as the sector soared amid a host of new policy support signals for the real-estate market. Country Garden jumped 8.7%, China Resources Land added 4.9% while Longfor gained 4.7%.

Japanese stocks ended higher, led by gains in railway and airline stocks, on hopes of easing pandemic-related border restrictions. East Japan Railway and Japan Airlines climbed 1.9% each. The Nikkei Stock Average rose 0.2% to 27875.91. USD/JPY was at 143.64, compared with 143.17 as of Wednesday 5 p.m. ET. U.S. economic data are in focus, including retail sales and weekly jobless claims due later in the day. The yield on the 10-year Japanese government bond was flat at 0.250%.

Europe

European stocks ended the day mixed. The pan-European Stoxx Europe 600 Index is down 0.65%, the German Dax Index is down 0.55%, while the French CAC 40 Index is down 1.04%.

In London, the FTSE 100 closed up 0.07% up on positive economic data from the US--August's retail sales data and the Labor Department's weekly jobless claims figures helped to ease economic concerns, IG analyst Joshua Mahony said in a note.

"The relatively healthy set of data points released today have helped ease fears of an impending economic crash, with initial jobless claims, and retail sales both improving over the month," Mahony said.

Barratt Developments was the day's biggest riser, closing up 4.4%, followed by Ocado and Taylor Wimpey, closing up 4.3% and 4.1% respectively. Melrose Industries was the biggest faller, closing down 4.3%.

North America

US stocks dropped Thursday, with investors mulling how this week's inflation report likely cements the Federal Reserve's path to continue raising interest rates aggressively.

The three major indexes fell at the open, rose briefly at midmorning and then fell again in erratic trading. The S&P 500 fell 44.66 points, or 1.1%, to 3901.35 after data showed a strong economy that could encourage the Fed to keep raising interest rates at a rapid pace.
The tech-focused Nasdaq Composite dropped 167.32 points, or 1.4%, to 11552.36. The Dow Jones Industrial Average fell 173.27 points, or 0.6%, to 30961.82.

The market is going to be choppy between now and the Fed meeting next week, said Ava Trade analyst Naeem Aslam. Mixed economic data and stubbornly high inflation make the Fed's job harder, though he said that talk of a full percentage-point interest-rate raise is likely overdone. But another raise of 0.75 percentage point is probable -- much to the market's chagrin.

Stocks had stabilized Wednesday after slumping on Tuesday, when the Labor Department reported that inflation had remained stubbornly high in August. The data jolted many investors who had hoped that fewer supply-chain strains and falling commodity prices would enable the central bank to tone down its inflation-taming efforts in the coming months. The S&P 500 on Tuesday endured its worst day since 2020.

"It looks like central banks certainly have got religion in terms of their inflation-busting mandate and they're unlikely to swing that to stabilizing economic growth," said Edward Park, chief investment officer at Brooks Macdonald.

Nonetheless, Mr. Park said he expects stocks to rise in the coming weeks. Investors have already braced for a 0.75-point increase to the Fed's main rate this month, he said. They are keen not to miss out on a rally that would likely follow data published in October if those statistics show inflation easing, he added.

Trading in interest-rate futures implies a 74% chance that the Fed raises rates by three-quarters of a percentage point at its meeting next week, according to CME Group. Market pricing suggests a 26% chance that the Fed raises its rate target by a full point.

On the economic front, retail sales rose 0.3% in August, the Commerce Department said Thursday, showing the resilience of U.S. consumers in the face of high inflation. U.S. applications for unemployment benefits declined for the fifth consecutive week as employers held on to their workers in a persistently tight labor market.

A separate report on industrial production registered a slight downtick, dropping 0.2% from July, showing U.S. factories lost some steam.

In corporate news, Adobe shares fell $62.39, or 17%, to $309.13 after the company agreed to buy collaboration-software company Figma for about $20 billion, in the technology giant's largest acquisition.

Railroad stocks fell in afternoon trading, even after the White House said a tentative agreement had been reached to avert a shutdown on railways. Shares of Union Pacific edged higher by 41 cents, or 0.2%, to $218.36. CSX fell $1.06, or 3.4%, to $30.17.

Elsewhere, NextEra Energy fell $2.87, or 3.2%, to $86.01 after saying it would raise almost $2 billion in equity.