'We need to see some heat': Fed's gloomy outlook boosts Wall St to record high

Australian shares are likely to open flat, despite Wall Street hitting record highs on strong expectations the US Federal Reserve will cut interest rates for the first time in a decade.

Market snapshot at 7:50am (AEST):ASX SPI futures +0.1pc at 6,635, ASX 200 (Wednesday’s close) +0.4pc at 6,690AUD: 69.62 US cents, 55.65 British pence, 61.86 euro cents, 75.48 Japanese yen, $NZ1.05US: Dow Jones +0.3pc at 26,860, S&P 500 +0.5pc at 2,993, Nasdaq +0.75pc at 8,203Europe: FTSE 100 -0.1pc at 7,531, DAX -0.5pc at 12,373, CAC -0.1pc at 5,568, Euro Stoxx 50 -0.2pc at 3,502Commodities: Brent crude +3.9pc at $US66.68/barrel, spot gold +1.5pc at $US1,418.80/ounce, iron ore -0.5pc at $US120.96/tonne

Meanwhile, the Australian dollar has risen to 69.62 US cents due to a weaker greenback.

The US dollar fell after Fed chair Jerome Powell gave a downbeat outlook for the US economy in his closely-watched testimony on monetary policy to Congress.

Essentially, it reinforced the market’s strong expectations that the Fed will cut America’s interest rates at the end of this month.

That boosted the stock market in New York, with the benchmark S&P 500 index rising 0.5 per cent to 2,993 — though it briefly hit 3,000 points at its peak.

The Dow Jones index lifted 0.3 per cent to 26,820.

However, the tech-heavy Nasdaq was the best performer, up 0.75 per cent, thanks to strong gains from Amazon (+1.5pc), Microsoft (+1pc) and Apple (+1pc) shares.

What did Powell say?

The US central bank’s chief said “broad” global weakness was clouding the US economic outlook amid uncertainty about the fallout from the Trump administration’s trade conflicts with China and other nations.

Although the US Government reported strong jobs growth in June, other major economies’ “data have continued to disappoint … across Europe and around Asia, and

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