Wall Street Rally Fuels Optimism for Australian Investors

A robust close on Wall Street has investors in Australia poised for a positive week. The S&P 500 surged to a record high, rising 0.6 per cent to 7757.64. This increase was driven by an unexpected July jobs report, which showed employers cut jobs, providing the Federal Reserve with room to maintain current interest rates for longer.

Scotiabank's Derek Holt noted that the US job market is 'clearly grinding to a halt.' The S&P 500 recorded a 3.6 per cent gain for the week, adding over $US2.5 trillion in market capitalisation, while the Nasdaq Composite climbed 5.2 per cent and the Dow Jones advanced 3 per cent.

The softening labour market has influenced expectations for the Fed, with money markets now projecting a rate hike no sooner than December 2026. Atlassian, an Australian-founded software company, saw its US shares jump an impressive 35.3 per cent to $US149.07 after its quarterly results far exceeded expectations.

Bank of America and Oppenheimer upgraded Atlassian with lifted price targets, citing its data value and AI integration potential. Locally, ASX 200 futures point higher ahead of Tuesday's Reserve Bank of Australia policy meeting, where the cash rate is widely expected to be held unchanged at 4.35 per cent.