Australian shares are set to open higher on Thursday, supported by firmer commodity prices despite a subdued lead from Wall Street, as investors continued to monitor rising oil prices, corporate earnings and the outlook for Australia's labour market.
ASX 200 futures were up 72 points, or 0.8%, indicating the benchmark index would open around 8,839.
On Wall Street, the major U.S. indexes finished mostly lower as investors assessed earnings from major technology companies and remained cautious over higher energy prices.
The Dow Jones Industrial Average slipped 0.01%, the S&P 500 fell 0.1%, and the Nasdaq Composite declined 0.6%.
In after-hours trading, both Alphabet and Tesla fell around 3% as investors digested their quarterly results and management commentary, with concerns centred on rising AI investment costs at Alphabet and weaker profitability at Tesla.
"Investors have become a lot more discerning and specific as to where they're choosing to invest in the AI trade," Charles Schwab head of macro research and strategy Kevin Gordon was quoted as saying in a Reuters story, noting the divergence in performance between software and semiconductor stocks.
He added that rising oil prices were also influencing broader market sentiment.
"Excluding the megacap AI trade, there's an element of what's going on with oil that's driving the market."
"People are being defensive with utilities, but with energy and materials being higher, that's the inflation component."
Crude oil extended gains to its highest level in around six weeks as tensions between the United States and Iran continued to escalate, fuelling concerns over potential disruptions to shipping through the Strait of Hormuz.
The Australian sharemarket ended Wednesday's session 0.3% higher, with gains in the materials and energy sectors offsetting weakness across much of the broader market.
Attention now turns to Australia's labour force report, where economists expect employment to increase by 15,000 in July while the unemployment rate is forecast to remain unchanged at 4.4%. The data could provide fresh clues on the Reserve Bank of Australia's policy outlook.
On the bond markets, U.S. Treasury yields edged lower, with the 10-year yield falling 0.2% to 4.983% and the two-year yield easing 0.5% to 4.587%.
