AU Morning Wrap: ASX plunges; investors eye jumbo Fed rate rise

Wall Street Summary
US stocks crumpled after Friday's consumer price data dashed hopes inflation had peaked. Selling accelerated overnight after the Wall Street Journal reported the Federal Reserve may increase its target rate by 75 basis points tomorrow night.

The $S&P 500 Index (.SPX.US)$ dived 151 points or 3.88 per cent. Coming on the back of Friday's 2.91 per cent loss, the decline extended the benchmark’s fall since its January peak beyond 21 per cent.

The $Dow Jones Industrial Average (.DJI.US)$ plunged almost 900 points for a second straight session. The blue-chip average shed 876 points or 2.79 per cent last night and 880 points or 2.73 per cent on Friday.

The $Nasdaq Composite Index (.IXIC.US)$, already deep in bear market territory, fell 531 points or 4.68 per cent overnight and 414 points or 3.52 per cent on Friday.

AU Market Watch
Australia's S&P/ASX 200 looks likely to plummet when it reopens from a three-day holiday weekend. ASX futures are down by 2.7%, suggesting the benchmark index will follow the path set by U.S. equities over recent trading sessions. The S&P 500 tumbled into bear-market territory on Monday, dropping 3.9% as the stocks sell-off accelerated on inflation fears.

Australian shares opened lower this morning. The $S&P/ASX 200 (.XJO.AU)$ lost 4.85 per cent to 6596 as of 10:11 am.

Stocks to Watch
$Pro Medicus Ltd (PME.AU)$: Health imaging company Pro Medicus has signed two contract renewals worth a combined value of $47 million.

$Viva Leisure Ltd (VVA.AU)$: Health club owner and operator Viva Leisure expects to exceed guidance for the 2022 financial year. The company achieved revenue for May above $10 million, and it expects second half revenue to exceed previous guidance of $54 to 56 million.

$Lynas Rare Earths Ltd (LYC.AU)$: Lynas Rare Earths has signed a follow-on contract for about $US120 million with the US Department of Defence to establish a commercial heavy rare earths separation facility in the US.

Ex-dividend: $CIMIC Group Ltd (CIM.AU)$, $KMD Brands Ltd (KMD.AU)$

Dividends paid: $Amcor PLC (AMC.AU)$, $Whitefield Industrials Ltd (WHF.AU)$

Commodities
• Iron ore futures softened on Monday due to depressed market sentimen, sources told Fastmarkets.
• Oil prices remain unchanged despite the overnight carnage, reminding investors that energy markets remain extremely tight.
• Gold prices are under pressure as traders reassess more aggressive interest rate hikes to get inflation under control.

Source: Dow Jones Newswires, AFR