ASX Set to Rise as Soft US Inflation Data Lifts Wall Street; IBM Plunges

The Quick Take

• Wall Street rose after US inflation came in better than expected, and the ASX is set to follow with gains.
• IBM plunged in a major single-session decline, weighing on technology sector sentiment despite the broader index rally.
• Australian equity markets are set to open higher, tracking Wall Street's gains from the better-than-expected US CPI print.

The softer-than-expected US inflation data for June became the dominant catalyst for global equity markets, with Wall Street advancing and setting the stage for the Australian Securities Exchange to follow with gains in the next trading session. The positive inflation surprise reduced the probability of a Federal Reserve interest rate hike, directly supporting equity risk appetite globally. IBM's sharp session decline stands as the key counterbalancing force — the technology giant's profit warning highlighted that enterprise AI spending is lagging behind market expectations, creating a bifurcated technology sector narrative within an otherwise recovering market.

Australian equity markets are particularly sensitive to US CPI data because ASX 200 constituents include major global commodity exporters and financial stocks whose valuations track global rate sentiment closely. A softer US CPI reduces discount rates, particularly benefiting ASX's rate-sensitive real estate investment trusts and growth-oriented technology stocks. IBM's plunge creates a negative read-across for Australian technology consultants and software vendors with enterprise exposure, though the impact is concentrated rather than broad. The ASX's net reaction will weigh the positive macro CPI signal against IBM's sector-specific earnings warning.

The Reserve Bank of Australia's next policy decision will be the domestic pivot — if the RBA follows the US inflation moderation narrative with a more dovish tone, Australian growth stocks could extend their gains significantly. IBM's full earnings disclosure will clarify whether the enterprise AI slowdown is isolated to IBM's positioning or reflects a sector-wide timing issue that could affect Australian technology consultants. The macro variable for the ASX is the combined trajectory of commodity prices and global rate expectations — opposite forces that have created the current complex market environment requiring nuanced sector selection.

Synthesized from 2 sources.