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The share market was set to recoup some of its “rates shock” losses following a tech and energy-led rally on Wall Street.

ASX futures bounced 45 points or 0.63 per cent as US stocks overcame early weakness. The S&P/ASX 200 plunged 1.53 per cent yesterday after the RBA surprised the market by raising the cash rate target by 50 basis points.

Overnight, US crude oil climbed to a three-month high. Uranium miners soared amid White House plans to wean the country off imported Russian uranium. The dollar firmed above 72 US cents.

Wall Street

US stocks closed at session highs as a retreat in bond yields helped the market weather pressure on retailers following a margin warning from Target.

The S&P 500 rallied 39 points or 0.95 per cent to a second straight gain. The Dow Jones Industrial Average advanced 264 points or 0.8 per cent. The Nasdaq Composite added 114 points or 0.86 per cent.

“We’ve had a nice bounce,” Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder, told Reuters. “In general investors are feeling better right now. But we are very much in a seesaw market as we’ve seen all year,” he added.

The energy sector led as West Texas Intermediate crude logged its highest close since March 8. The US benchmark climbed 91 cents or 0.8 per cent to US$119.41 a barrel. The international benchmark, Brent crude, settled US$1.06 or 0.9 per cent ahead at US$120.57, its best finish since May 31.

Exxon Mobil rose 4.58 per cent as the sector rallied 3.14 per cent to a fresh eight-year high. ConocoPhillips put on 4.54 per cent and Chevron 1.91 per cent. Energy stocks have risen 60 per cent this year.  

Dip-buyers helped tech overcome early pressure. Apple swung from a 2 per cent loss in pre-market trade to a closing gain of 1.76 per cent. The tech giant revealed a slew of new features on Monday, including a BNPL offering.

Equities got a leg-up from favourable bond market movements. The yield on ten-year US treasuries dropped back under 3 per cent, easing pressure on equity valuations. Stocks have struggled this year as increased borrowing costs prompt analysts to downgrade the value of future earnings.

Retailers slumped after Target cut its margin forecast, warning it would have to offer discounts to clear inventory. The company said it was cancelling orders with suppliers due to weak demand and changing customer behaviour.

The retailer’s shares plunged as much as 7 per cent before paring their loss to 2.31 per cent. Walmart declined 1.2 per cent, Best Buy 1.16 per cent and Amazon 1.43 per cent.

Department store Kohl’s jumped 9.54 per cent after confirming takeover talks with Franchise Group.  

Australian outlook

A constructive session in the US looks likely to help the ASX move on from yesterday’s unexpectedly hawkish rate rise. The S&P/ASX 200 plunged 111 points after the RBA delivered the biggest increase in the cash rate target in 22 years.

While the announcement sent shockwaves through the market, the tremors should settle now the market has a clearer vision of where rates are headed. Many economists were troubled by the central bank’s sluggish initial response to inflationary pressures. Better late than never.

Yesterday’s losses were likely exaggerated by negative signals from Wall Street. US equity futures were down 0.75 per cent at the Australian close, pointing to a losing night in the US. In the event, early weakness on the NYSE was swiftly overcome.

Energy was the pick of the sectors, rising 3.14 per cent. Industrials, health and tech all gained at least 1.2 per cent.

Materials and financials both put on around 0.7 per cent. Retail losses meant consumer discretionary was the only decline, falling 0.37 per cent.

IPOs: Southern Palladium debuts at 11 am AEST. This explorer is in the process of acquiring an interest in a palladium/rhodium project in South Africa. The company has applied for a secondary listing on the Johannesburg Stock Exchange.

The dollar rallied 0.64 per cent overnight to 72.32 US cents.

Commodities

US uranium miners jumped amid reports of a US$4.3 billion plan to support domestic producers and end US dependency on Russian imports. Uranium has so far been excluded from US embargoes on Russian energy because Moscow reportedly supplies almost a quarter of the enriched uranium used in US nuclear reactors.

The Global X uranium ETF surged 5.98 per cent. Cameco flew up 7.77 per cent. Energy Fuels soared 12.68 per cent.

Falling port inventories helped iron ore advance. The spot price for ore landed in China firmed 57 US cents or 0.4 per cent to US$145.81 a tonne.

BHP‘s US-traded depositary receipts rallied 3.64 per cent. The miner’s UK listing improved 1.92 per cent. Rio Tinto gained 3.28 per cent in the US and 2.27 per cent in the UK.

Gold rose for the first time in three sessions as the US dollar and treasury yields retreated. Metal for August delivery settled US$8.40 or 0.5 per cent ahead at US$1,852.10 an ounce. The NYSE Arca Gold Bugs Index tacked on 0.59 per cent.

Copper declined during a mixed night on the London Metal Exchange as early strength in the greenback suppressed buying interest. Benchmark copper eased 0.4 per cent to US$9,699.25 a tonne. Aluminium dipped 0.2 per cent, nickel 0.8 per cent and zinc 1.9 per cent. Lead firmed 0.6 per cent and tin 1.4 per cent.

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