Live: ASX set to lift as Wall Street slump arrested

The Australian Securities Exchange (ASX) is poised for a positive opening this morning, with futures indicating a rise of approximately 0.5%. This anticipated gain comes after Wall Street managed to arrest its slump, showing signs of recovery in a week marked by volatility. The rebound on US markets on Friday provided a much-needed boost to investor confidence.

On Friday, key US indices registered gains: the S&P 500 rose by 0.4%, the Dow Jones Industrial Average climbed 1.0%, and the Nasdaq Composite also saw a 0.4% increase. Despite these gains, the S&P 500 concluded the week with a 1.4% decline, while the Nasdaq's rise ended a five-day losing streak. Throughout the week, market movements were largely dictated by the direction of US government bond yields, as the prospect of higher borrowing costs weighed on risk appetite.

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In the middle of the week, equity investors were concerned yields could be on a one-way trip higher.

Investor nerves had been particularly frayed as 30-year Treasury Bond yields approached nearly 20-year highs. However, US Treasury Secretary Scott Bessent's efforts to calm markets, including a surprise announcement to double expected bond repurchases, appeared to have a stabilizing effect. Chris Zaccarelli, chief investment officer at Northlight Asset Management, noted that Friday felt calmer on Wall Street after a week of seesawing trading, suggesting that investors are less concerned about yields on a one-way trip higher.

While the US Treasury's actions have not yet suppressed rising interest rates, they have contributed to a weakening of the US dollar against major currencies. This currency movement saw the Australian dollar close the week higher at 71.74 US cents, its strongest weekly close in three months. Gold prices also benefited, hitting a three-month high above $US4,600 per ounce. Positive economic news from the US services sector, which reported its strongest growth in nearly two years, further eased investor worries, although a slowdown in the manufacturing sector persisted.

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With the Treasury Department announcement, investors aren't as worried anymore.