ASX set to slide as Wall Street hit by tech slump; Gold, silver rebound
Stan Choe
Updated ,first published
While the US stock market fell in mixed trading, gold and silver rose after the recent sell-off.
The S&P 500 fell 0.8 percent, moving further away from last week’s all-time high. The Dow Jones Industrial Average fell 166 points (0.3 percent) and the Nasdaq composite fell 1.4 percent.
The Australian share market is poised for a decline, with futures pointing to a 20-point, or 0.2 per cent, decline at the open. 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 2.8 percent for Nvidia and 2.9 percent for Microsoft. After years of dominating the market, such giants have been disrupted by concerns that their stock prices have become too high and too expensive.
Shares of software companies and others seen as potential losers to AI-powered rivals also fell. ServiceNow fell 7 percent, bringing its young year’s loss to 28.3 percent.
Those declines dragged the S&P 500 into its fourth loss in five days, but the majority of stocks in the index were higher. That includes a 6.8 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.
Some of the strongest moves of the day remained in metals markets. The price of gold settled at $4935.00 per ounce with an increase of 6.1 percent in the last move, after its jaw-dropping rise stopped suddenly last week. Making even more crazy moves, the price of silver increased by 8.2 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 what shifted the momentum were expectations that President Donald Trump’s nominee to chair the Fed would keep interest rates high to fight inflation, 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 with so many investors turning to gold as a way to bet on continued US dollar weakness.
“This move underlined how tense the anti-USD positioning has become,” according to strategists at Barclays.
On Wall Street, PayPal fell 20.3 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 3.3 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.
Spanish bank Banco Santander’s U.S. trading fell 6.4 percent after it said it would acquire Webster Financial in a cash-and-stock deal worth about $12.3 billion. Webster Bank’s parent company gained 9 percent.
On the winning side of the market was PepsiCo, which rose 4.9 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.
Walt Disney Co. lost 0.2 percent after Josh D’Amaro, president of the company’s parks business unit, was announced as the next CEO in March.
DaVita gained 21.2 percent after the dialysis and other health care provider similarly reported better-than-expected profits in the latest quarter.
Overall, the S&P 500 fell 58.63 points to 6,917.81 points. Dow Jones index decreased by 166.67 points to 49,240.99, and Nasdaq index decreased by 336.92 points to 23,255.19 points.
In the bond market, the yield on the 10-year Treasury note fell from 4.29 percent to 4.26 percent at the end of Monday.
As for foreign stock markets, indices in Asia recovered after the sharp losses of the previous day.
In South Korea, the Kospi index rose 6.8 percent, its best performance since the crazy 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 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 fell in Europe; France’s CAC 40 index lost less than 0.1 percent.
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