Wall Street hits records, Dell soars; ASX set to slip
Staff writers
Updated ,first published
The Australian stock market has had an unstable start to the week due to growing uncertainty over the peace deal in the Middle East.
The S&P/ASX 200 fell 17.8 points, or 0.2 per cent, to 8,713.9 in early trade, while nine of 11 industrial sectors were in negative territory. The United States and Iran exchanged messages over the weekend about making changes to a draft agreement that would extend a ceasefire and open the vital Strait of Hormuz, but it was unclear whether the sides had made much progress.
Energy stocks are weak this morning as oil prices fell sharply over the weekend and stabilized this morning. Brent, the international benchmark, was at just over US$93 a barrel at 10.20am (AEST) after closing at its lowest level since mid-April on Saturday, while West Texas Intermediate was near US$89. Woodside Energy lost 1.8 percent in early trading, while Santos fell 1.4 percent. Among refineries, Ampol fell 2.1 percent and Viva Energy fell 1.7 percent.
“Neither Iran nor the US are willing to compromise or compromise on their red lines for a deal,” said Hamzeh Al Gaaod, independent economist for the Middle East and North Africa region. He said oil prices will likely continue to move through an “explanatory cycle,” with prices oscillating between optimism and caution as new headlines emerge.
Mining shares rose, with BHP gaining 0.5 percent, Fortescue gaining 0.8 percent and Rio Tinto gaining 1.3 percent. Gold miners made progress; Northern Star rose 0.7 percent and Evolution Mining rose 1.7 percent.
Financial stocks are weaker; Commonwealth Bank fell 1 per cent, National Australia Bank fell 0.2 per cent, Westpac fell 0.3 per cent and ANZ Bank fell 0.8 per cent.
Technology stocks jumped after the sector led Wall Street higher on Friday. WiseTech was up 5.4 percent in early trading, Xero was up 4.7 percent, Technology One was up 4 percent and NEXTDC was up 1.8 percent.
The Australian dollar was trading at ¢71.82 at 10:02 AEST.
On Wall Street on Friday, the S&P 500 rose 0.2 percent for its seventh straight gain and ninth straight winning week; this was the longest streak since 2023. The benchmark index reached an all-time high for the fourth day in a row. Dow Jones gained 0.7 percent and Nasdaq composite gained 0.2 percent. The Dow and Nasdaq also reached new highs after hitting record highs earlier in the week.
Big tech stocks are behind much of Wall Street’s record-breaking streak. Expensive stock valuations give them more influence in driving the market higher or lower. In May alone, technology stocks in the S&P 500 rose more than 15 percent while most sectors in the benchmark index actually lost value.
“The rally has been largely technology-led and supported by resilient gains, but the real question is whether it can be sustained,” Angelo Kourkafas, senior global strategist at Edward Jones, wrote in a research note.
Microsoft gained 5.4 percent and Broadcom gained 4.7 percent.
Dell Technologies rose 32.8 percent to lead all stocks in the S&P 500 after posting profits that beat expectations. The company also upgraded its outlook, citing strong demand for AI computing.
Most other sectors in the S&P 500 posted losses on Friday. Among the decliners: Paramount Skydance fell 1.9 percent, Amazon.com fell 1.2 percent and Costco Wholesale fell 3.9 percent.
Treasury yields have remained relatively stable as oil prices have fallen. The yield on the 10-year Treasury note fell to 4.44 percent from 4.45 percent on Thursday.
The Fed is keeping its benchmark interest rate steady as it closely monitors rising inflation. CME is expected to continue keeping interest rates steady at its next meeting in June and throughout the year, according to the FedWatch tool. Lowering interest rates could help lower borrowing costs and shake up the economy, but it could also worsen inflation at a time when prices are already high and rising.
With AP and Bloomberg
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