Australian shares are set to open higher on Monday, with the S&P/ASX 200 expected to reach a fresh high as investors prepare for a busy week of company earnings and a key Reserve Bank of Australia policy meeting.
ASX 200 futures indicate the index will rise 33 points, or 0.4%, at the opening bell.
The expected gain follows a strong session on Wall Street, where the S&P 500 closed at a record high on Friday.
All three major U.S. indexes posted their biggest weekly gains since April as strong corporate earnings eased concerns over heavy spending by artificial intelligence companies.
The Dow Jones Industrial Average rose 151.8 points, or 0.3%, to 54,036.9, while the S&P 500 gained 47.7 points, or 0.6%, to 7,757.6. The Nasdaq Composite climbed 342.3 points, or 1.3%, to 26,690.6.
Market sentiment was further supported by a weaker-than-expected U.S. employment report. Nonfarm payrolls fell by 23,000 in July, compared with expectations for an increase of 80,000, reducing expectations of a Federal Reserve rate hike at its September meeting.
"You probably have to lower rates to kind of stimulate job growth, but if you lower rates, you're going to also stimulate inflation. So you're kind of in a pickle at this point, and yet the market's just taken off because earnings have been stellar," Tom Siomades, chief market economist at AE Wealth Management in Topeka, Kansas, was quoted as saying in a Reuters story.
"The market should be reacting to weak job numbers and higher inflation and the possibility of a slow-growth economy that may need to have rates raised rather than cut, and yet it's not. We're setting records, so go figure."
The Australian sharemarket slipped on Friday as investors monitored diplomatic developments in the Middle East following reports that Iran could prevent U.S. and Israeli vessels from using the Strait of Hormuz.
The S&P/ASX 200 fell 8.0 points, or 0.1%, to 9,263.6, with seven of the 11 sectors ending lower.
Investors will focus on the RBA's policy meeting on Tuesday, when the central bank is widely expected to leave the cash rate at 4.35% after raising interest rates three times since February to curb inflation.
The earnings season will also take centre stage, with Commonwealth Bank among the major companies scheduled to report results.
On the bond markets, the 10-year yield was flat at 4.969%, while the 2-year yield fell 0.4% to 4.556%.
