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The share market looks set to give back some of this week’s gains ahead of the mid-morning May jobs report after coronavirus concerns weighed on Wall Street.

ASX SPI200 index futures declined 36 points or 0.6 per cent as the Dow and S&P 500 broke three-session winning runs.

Wall Street fell away at the close of the session as the COVID-19 infection rate ticked higher in many US states and China cancelled flights and closed schools to contain a fresh outbreak. The S&P 500 dropped 11 points or 0.36 per cent. The Dow shed 170 points or 0.65 per cent. The Nasdaq edged up 15 points or 0.15 per cent.

The Nasdaq outperformed as investors favoured ‘big tech’ over companies that depend on successfully reopening the US economy. Netflix gained 2.7 per cent, Amazon 1 per cent and Alphabet and Microsoft 0.4 per cent. Apple hit an all-time high before closing 0.14 per cent lower.

The rotation out of ‘big tech’ into recovery plays has stalled in the last week amid signs many US states are struggling to contain the pandemic as they lift lockdown restrictions. Texas, Florida, Arizona, Oregon and Oklahoma all announced record increases in new cases on Tuesday, according to Reuters. Several states also recorded record levels of hospitalisations.

The S&P 1500 Airlines Index sank 1.6 per cent. Norwegian Holdings dived 8.4 per cent after announcing a two-month delay in restarting cruises. Carnival slumped 6.5 per cent and Royal Caribbean 7.2 per cent. Several retailers also fell heavily.

Australian stocks struggled for traction for much of yesterday after China announced tough new measures to contain an outbreak in Beijing. The S&P/ASX 200 was flat at lunchtime, but kicked higher late in the day to finish 50 points or 0.8 per cent ahead. The rally extended a 3.9 per cent charge on Tuesday that was the index’s biggest rise in ten weeks. The Shanghai Composite inched up 0.14 per cent.

The May employment report at 11.30 am EST will have a big say in how today’s Australian session plays out. Economists anticipate a rise in the jobless rate from 6.2 per cent to 6.9 per cent as the economy shed another 105,000 jobs.

In the US, Federal Reserve Chair Jerome Powell warned Congress not to wind back fiscal support for the economy too quickly. In testimony before the House Financial Services Committee, Powell said, “This is a critical phase, the economy is just now beginning.” Despite recent signs of improving economic data, America was still in the early stages “of the bounce–back”.

Just three US sectors inched higher: technology, communication services and consumer discretionary. The energy sector skidded 3.3 per cent after the US Energy Information Administration reported an increase in US crude stockpiles last week. Brent crude settled 25 cents or 0.6 per cent lower at US$40.71 a barrel.

BHP and Rio Tinto traded mixed in overseas action following a retreat in the price of iron ore. BHP’s US-listed stock gave up 0.82 per cent and its UK-listed 0.02 stock per cent. Rio Tinto edged up 0.02 per cent in the US and 0.1 per cent in the UK. The spot price for iron ore landed in China dipped $1.85 or 1.8 per cent to US$103.60 a dry ton.

Copper marched higher during a broadly positive session on the London Metal Exchange. Benchmark copper gained 0.7 per cent to US$5,741 a tonne. Aluminium advanced 0.4 per cent, lead 2.3 per cent, zinc 1.3 per cent and tin 0.1 per cent. Nickel eased 1.2 per cent.

Gold closed near flat as a strengthening US dollar dampened buying interest. Gold for August delivery settled 90 cents or less than 0.1 per cent lower at US$1,735.60 an ounce.

The dollar eased 0.04 per cent to 68.8 US cents.

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