Morning Wrap: ASX 200 to slip, S&P 500 higher while Dow hits record highs, China's ban on BHP iron ore in focus

ASX 200 futures are down 11pts (-0.12%) as of 8:30 am AEST.

In a nutshell:

• Major US benchmarks broadly higher, closed near best levels

• S&P 500 within 0.5% of last Monday's record high, Dow closed at fresh all-time highs

• US shutdown receiving a lot of attention, key concern potential delay in Friday's high-profile employment data and potential downward pressure on the US dollar

Let's dive in.

S&P 500 SESSION CHART

S&P 500 higher, closed near best levels (Source: TradingView)

OVERNIGHT MARKETS

• S&P 500 higher and closed near session highs

• Dow closed at fresh all-time highs, powered by gains from Healthcare names like Merck (+6.8%), Amgen (+3.0%) and J&J (+2.0%)

• S&P 500 within an arms reach of last Monday’s record high

• US monthly recap: Nasdaq (+5.61%), S&P 500 (+3.53%), Russell 2000 (+2.96%), Dow (+1.87%) 

• Looming US government shutdown receiving a lot of attention, though analysts have downplayed concerns about economic implications and prior shutdowns have had minimal impact on markets

• Biggest shutdown concern is the delay of September employment data on Friday

• Markets heading into the seasonally stronger months (Oct, Nov and Dec), though month-and-quarter end rebalancing and buyback blackout period flagged as overhangs

• Investors brace for economic data delay from potential US shutdown (NYT)

• US dollar index has weakened during the past three most recent government shutdowns (YF)

• Alphabet on track for biggest quarterly gain in 20 years on AI momentum (BBG)

• US small-cap investors quickly cashing out after recent rally, with $5.4bn withdrawn from iShares Russell 2000 ETF YTD (BBG)

• Market participates see China equity rally struggling for further upside by year-end amid stretched valuations, crowded AI trade (BBG)

• Japan 2-year bond auction draws weakest demand since 2009 amid BOJ rate hike speculation (BBG)

• OPEC+ to discuss potentially lifting output by 500,000 bpd per month over a three-month period, oil prices slip 1% to near four-month low (YF)

STOCKS

• OpenAI generated $4.3bn in revenue in the first half of 2025, up 16% from 2024, with $2.5bn in spending (TI)

• Trump and Pfizer announce agreement to lower Medicaid drug prices (CNBC)

• Ford CEO expects EV sales to be cut in half after end of tax credits (CNBC)

• Oklo is targeting to launch at least one of its three planned US nuclear reactors by mid-2026 (BBG)

• Hertz Global launches fully online car-buying marketplace (YF)

• Deloitte's $7.6 billion UK business just posted its first revenue decline in 15 years (BI)

• Zijin Gold surges in trading debut, representing world's largest IPO in four months (SCMP)

TARIFFS

• US discusses a "50-50" chip production split with Taiwan, aiming for 40% domestic chip output by Trump's term end (CNBC)

• Trump's drug price concession deadline passes, with pharma industry commitments lacking in lowering US prices (AX)

CENTRAL BANKS

• St. Louis Fed President Musalem open to further rate cuts, but stresses need to proceed cautiously (BBG)

• RBA on hold as expected, warns of inflation risks (BBG)

• ECB's Lane signaled policy likely to remain on hold for time being at panel discussion Monday (BBG)

• India rate decision today expected to be close call as policymakers weigh growth risks against record low currency (BBG)

US SHUTDOWN

• Federal government on track for a shutdown at midnight with no funding deal yet reached amid large differences on health care views (CNBC)

• White House outlines service pauses for potential government shutdown, with 41% of health department workforce facing furloughs (RT)

ECONOMY

• US job openings barely increase in sign of stable labour demand (BBG)

• China manufacturing sector in longest contraction since 2019, private gauge shows activity firmed (BBG)

• Inflation in France and Italy accelerates but stays below ECB's 2% target (BBG)

• UK GDP growth slows to 0.3% in Q2 2025, down from 0.7% in the previous quarter (RT)

ASX TODAY

• China bans new BHP iron ore cargos, escalating price dispute (BBG)

• Star Entertainment recognises assessment of tax position, reports audited FY25 normalised net loss of $215.5m vs. unaudited $259.1m (SGR)

WHAT TO WATCH TODAY

• AGM season: October kicks off AGM season, which tends to be a little hit or miss in terms of new info/data from companies. You can view the Australian Shareholders Association has an AGM calendar for what's upcoming.

• IPOs galore: There are currently ten IPOs scheduled for October, the most I've seen in a while. You can check out what's upcoming at the ASX's upcoming floats site.

• BHP: China's ban on BHP imports has attracted significant attention, though the miner's ADRs closed down just 0.8%, recovering from session lows of 2.1%. The move appears designed to force a better pricing outcome. BHP accounts for approximately 12% of China's iron ore imports, a gap no other supplier can fill. The ban is ultimately unsustainable, meaning something will have to give.

BROKER MOVES

• Macquarie Technology Group initiated Outperform with $97.30 target (MQG)

Stocks trading ex-dividend: 

• Wed 1 Oct: Cedar Woods Properties (CWP) – $0.19, Nick Scali (NCK) – $0.33

• Thu 2 Oct: ARB Corporation (ARB) – $0.35, Cosol (COS) – $0.012, Imperial Pacific (IPC) – $0.07, London City Equities (LCE) – $0.025, Wam Strategic Value (WAR) – $0.03

• Fri 3 Oct: Steamships Trading Company (SST) – $0.128

Other ASX corporate actions today: 

• Dividends paid: Eagers Automotive (APE), COG Financial Services (COG), Freightways Group (FRW), Inghams (ING), Regal Partners (RPL), Santos (STO), Worley (WOR)

• Earnings: None

• IPOs: Ryman Healthcare (RYM) at 11:00 am

• AGMs: AMCIL (AMH), Mirrabooka Investments (MIR)

Economic calendar (AEST):

• 9:00 am: Australia Ai Group Industry Index (Sep)

• 7:00 pm: Eurozone Inflation (Sep)

• 12:00 am: US ISM Manufacturing PMI (Sep)