The markets are abuzz with a mix of geopolitical tensions and economic data, with the ASX 200 poised for a rise, while the S&P 500 and Nasdaq have already shown strength following the release of cooler-than-expected US inflation data. The focus is on the Federal Reserve's next move, with the September hike odds falling to 63% after the June CPI report. The data showed a softer-than-expected core CPI, with the annual rate cooling to 2.6%, the lowest since February 2026. This has led to a reduction in Fed tightening bets, with the funds target now sitting at 3.5% to 3.75%.
In other news, IBM shares have cratered by 25%, their worst day on record, after the company pre-announced its Q2 results, with revenues coming in well below estimates. The company's management cited a worsening in discretionary IT spending and rapidly evolving cybersecurity concerns as the main themes across most software companies. This has led to a surge in cybersecurity stocks, with CrowdStrike soaring 12% to all-time highs.
The global market is also being driven by commodity prices, with oil holding near a one-month high and the US beginning a naval blockade of Iranian ports. The CPI print has driven strong gains for copper, lithium, and gold equities overnight, with the Copper Miners ETF up 5.88% and the Gold Miners ETF up 2.06%.
In the ASX, there are a few key events to watch, including the release of China's GDP growth and industrial production data, as well as the Bank of Canada's interest rate decision. The market is also keen to see how Experience Co. trades after signing a non-binding term sheet to sell its skydive business for $41m cash and a 32.5% equity stake in MergeCo. The company has a market cap of just $60m, and the skydive business represented ~45% of Group revenues in 1H26.
Overall, the markets are showing a mix of strength and weakness, with the ASX 200 poised for a rise, while the S&P 500 and Nasdaq have already shown strength. The focus is on the Federal Reserve's next move, with the September hike odds falling, and the markets are also being driven by commodity prices and geopolitical tensions.
