Market Highlights: ASX to open lower after US inflation rises, Arm shares trading on Nasdaq tonight

The ASX is set to open modestly lower
US inflation came in higher than last month, opening the door to Fed rate hike
The long-awaited Arm IPO is finally here

Australian shares are set to open slightly lower on Thursday after a mixed session on Wall Street overnight. At 8am AEST, the ASX 200 index futures was pointing down by just 5 points.

In New York, the S&P 500 rose by +0.12%, blue chips Dow Jones fell by -0.2%, and tech heavy Nasdaq was up by +0.29%.

Inflation in the US surged to 3.7% on a yearly basis in August from 3.2% in July – bolstering the chances of another Fed rate hike next week.

The Core CPI, which excludes volatile items such as food and energy, was up 4.3% Y-o-Y in August, but down from a 4.7% growth in July.

US government bond yields edged lower after the report release, suggesting that the market expects the Fed to hold.

“This latest US CPI data is unlikely to move the needle on the Fed’s highly anticipated move to hold rates steady at their meeting next week – which has already been priced-in by financial markets,” said Nigel Green of the deVere Group.

“But the uptick in inflation gives the US central bank extra reason to be hawkish moving forward. As such, we also expect the Fed will start to prepare the market for a rate increase at its November meeting.”

To stock news, megacap growth stocks Tesla, Meta, Microsoft and Amazon all gained between 1% to 3%.

American Airlines dipped 6% after downgrading its Q3 profit outlook due to higher fuel costs and a US$230 million payment in retroactive salary for its pilots.

3M also dropped 6% after the company’s CFO warned of a “slow growth environment.”

Back home, looking ahead to today’s action, Australia’s unemployment rate report is due out, along with population growth data.

Arm shares to finally trade on Nasdaq today

Shares in British microchip designer Arm are expected to trade on the Nasdaq later today (US time).

After going back and forth on valuations, the stock is likely to debut with a market cap of $54.5 billion at US$51 a share, according to Bloomberg calculations.

The IPO is the world’s biggest this year, surpassing the US$4.37 billion listing by Johnson & Johnson consumer health spinoff, Kenvue.

Arm has told the SEC that Japan’s SoftBank Group, which owns the company, will still retain 90% of the company after listing.

Arm has also reserved more than US$700 million of the stock for some of its biggest customers, including Intel, Apple, Nvidia, Samsung, and Taiwan Semiconductor Manufacturing.

“The big question mark remains future growth levels,” said Theo Maas, portfolio manager at Northcape Capital.

In other markets …

Gold fell -0.25% to US$1,908.90 an ounce. Base metal prices were higher, with nickel futures price lifting over 1%.

Crude prices traded flat, with Brent now at US$92.122 a barrel.

Iron ore futures rose almost 0.2% to US$120.53 a tonne.

The Aussie dollar was flat US64.21c.

Bitcoin meanwhile surged over 1% in the last 24 hours to US$26,284 after the CPI report.

5 ASX small caps to watch today

Nexus Minerals (ASX:NXM)
XRD analysis was used and has confirmed spodumene dominant lithium bearing mineral at Merrimac LCT Project. XRD analysis results have been received from four Merrimac rock chip samples which previously returned Li2O grades of 2.85%, 1.28%, 1.11% and 1.00%. Work is now underway to accurately map and classify intrusive bodies from existing geophysics.

Argent Minerals (ASX:ARD)
First pass tenement wide rock chip reconnaissance survey has identified multiple deposit styles. High-grade rock chip assay results include: 21.1% Cu (CH011), 20.6g/t Ag (CH023), 22.8% Mn (CH087), 0.38% Zn (CH024), 0.13% Co (CH073), 905 ppm TREE (CH073).

Recharge Metals (ASX:REC)
On-ground exploration will commence at Wapistan Lithium Project in James Bay, Canada in the coming days. Four high priority target areas have been identified at Wapistan, with potential for spodumene-hosted lithium mineralisation. Continuous updates will be provided as field work progresses, with assays to be delivered to laboratories in Val-d’Or, Quebec.

Battery Age Minerals (ASX:BM8)
Significant assay results have been returned from drilling program at Falcon Lake Lithium Project in Canada, with drilling continuing to delineate shallow, high-grade mineralisation. Intercepts include: 31.75m @ 1.45% Li2O from 14.46m down-hole, and 14.7m @ 1.50% Li2O from 3.7m down-hole.

Noble Helium (ASX:NHE)
Noble says well site preparation for Mbelele-1 is complete, and Marriott rig #16 is enroute from Dar es Salaam to the first well site. Mbelele-2 site is on schedule for completion by the end of the month. With these wells, the company aims to open a globally unique and significant “green” helium province with minimal technical and operational risk.

At Stockhead we tell it like it is. While Recharge Metals and Battery Age Minerals are Stockhead advertisers, they did not sponsor this article.