ASX set to fall as Wall Street scuffles; Gold, silver rebound
Stan Choe
While the US stock market is losing ground amid mixed trading, gold and silver are recovering from recent sell-offs.
The S&P 500 index fell further from last week’s all-time high, losing 0.9 percent; Despite this, the majority of stocks in the index rose. The Dow Jones fell 189 points, or 0.4 percent, while the Nasdaq composite fell 1.6 percent.
The Australian share market is poised for a decline, with futures pointing to a decline of 59 points, or 0.7 per cent, at the open at 5.02am AEDT. The ASX gained 0.9 per cent on Tuesday, while the RBA increased rates for the first time in more than two years. The Australian dollar was strengthened at 70.12¢ at 5.17am AEDT.
Several influential Big Tech stocks weighed on the market, including declines of 3.3 percent for Nvidia and 2.9 percent for Microsoft. These helped stifle a 6.5 percent rise for Palantir Technologies, which reported higher profits than analysts expected in its latest quarter. The forecast for a 61 percent increase in revenue this year also exceeded analysts’ expectations.
Movement in metal markets was strong again. The gold price rose 6.8 percent to $4970.40 per ounce in its latest rally after the jaw-dropping rally came to an abrupt halt last week. Making even more crazy moves, the price of silver increased by 11.6 percent.
Gold and silver prices had been climbing for more than a year as investors looked for safer places to park their cash amid concerns about everything from tariffs to a weak U.S. dollar to the heavy debt burdens of governments around the world. Prices have been particularly on the rise in the last month, with the price of gold at one point roughly doubling in 12 months.
However, these gains ended abruptly last week, with the price of gold falling from US$5600 to below US$4500 on Monday. Silver lost 31.4 percent of its value on Friday alone.
Many traders say expectations that President Donald Trump’s nominee to head the Fed would keep interest rates high to fight inflation initially shifted the momentum, but some disagree. Most people agree that simple gravity then comes into play.
After gold and silver prices rose so quickly, they were bound to fall back at some point, especially as so many investors piled in to use gold to bet on continued US dollar weakness.
“This move underlined how tense anti-USD positioning has become,” according to volatility strategists at Barclays.
On Wall Street, PayPal fell 19.7 percent in the latest quarter after reporting weaker results than analysts expected. It also appointed a new CEO after saying the “pace of change and implementation” over the past two years was “not in line” with the board’s expectations.
Pfizer fell 3.5 percent in its latest quarter, despite reporting stronger profits than analysts expected. The pharmaceutical company gave a forecast profit range with a midpoint in 2026 that was below analysts’ expectations.
Walt Disney Co. lost 0.6 percent after Josh D’Amaro, president of the company’s parks business unit, was announced as the next CEO in March.
On the winning side of the market was PepsiCo, which rose 3.2 percent after the snack and beverage giant’s profits and revenue in the last quarter exceeded analysts’ expectations. He also said he would lower prices on Lay’s, Doritos and other snacks this year to win back inflation-weary customers.
DaVita gained 20.3 percent after the dialysis and other health care provider similarly reported better-than-expected profits in the latest quarter.
In the bond market, the yield on the 10-year Treasury note remained at 4.29 percent late Monday.
As for foreign stock markets, indices in Asia recovered after the sharp losses of the previous day.
South Korea’s Kospi index rose 6.8 percent on its best day since the wild days of the Covid-19 crash and recovery in early 2020. Just a day earlier, it had fallen 5.3 percent from its worst day record in almost 10 months. Kospi is home to many technology stocks, including Samsung Electronics, which gained 11.4 percent.
While Japan’s Nikkei 225 index gained 3.9 percent in value, it increased by 1.3 percent in Shanghai and 0.2 percent in Hong Kong.
Indices in Europe are mixed.
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The Market Summary newsletter is a summary of the day’s transactions. Let’s each take ittoday afternoon.
