ASX to open flat ahead of RBA rate call; Wall Street wobbles as bonds spike

At the start of a new trading week, Wall Street investors remain cautious, with key indices edging lower early in the day. The Dow Jones Industrial Average falls 0.7 percent to 51,483 points, while the S&P 500 index dips 0.6 percent to 7,701 points. The Nasdaq Composite also loses 0.6 percent, settling at 26,904 points. The Nasdaq 100, representing the 100 largest non-financial companies by market capitalization, declines 0.9 percent to 30,333 points.

The selling of U.S. government bonds continues on Monday, with oil prices rising further, following Iran's rejection of President Donald Trump's recent proposal to reopen the Hormuz Strait. Brent crude and U.S. light oil both rise by 1.5 and 2 percent, respectively, increasing concerns about inflation. The yield on 10-year U.S. Treasuries hits a high of 5.2 percent, the highest since mid-June 2007.

The yield on 30-year bonds exceeds 5.5 percent. Investors are expecting further interest rate hikes from the Federal Reserve (Fed) due to persistent inflation. Ricardo Evangelista, an analyst at ActivTrades, notes that tensions between the United States and Iran have driven oil prices higher, fueling inflation fears and the expectation of a possible Fed rate hike.

As a result, demand for precious metals falls, with gold dropping more than three percent to $4,141 per troy ounce. The prospect of additional Fed rate hikes is seen by analysts as a reason for the demand for interest-bearing metals. Other precious metals, such as silver and platinum, also decline by more than three percent. The weaker precious metal prices also impact mining stocks, with shares of Goldcorp and Barrick Gold falling between three and five percent, while South African companies AngloGold Ashanti, Harmony Gold, and Sibanye Stillwater drop around five percent.

Several interest rate terms are expected to dominate the week, with the Fed's preferred inflation indicator, the private consumer spending index for August, released on Wednesday. New U.S. production data will be released on Thursday, followed by the eagerly awaited September employment report. Nvidia's announcement of an unprecedented stock buyback program gives the company a boost, with its shares rising nearly 3.5 percent.

Nvidia has announced a 150 billion dollar increase in its stock buyback program, the largest ever, surpassing even Apple's 2024 program. This amounts to a total of 235 billion dollars in buybacks through the end of the 2028 fiscal year. The booming artificial intelligence (AI) market is injecting money into Nvidia's coffers, enabling both investment and shareholder returns. Nvidia projects a 70 percent revenue growth for the fiscal year 2028.