Tech giants weigh on Wall Street; SpaceX swings higher; ASX set to rise
Damian Troise And Alex Veiga
Stocks fell on Wall Street as sales in major technology companies spread from Asia to the US due to concerns that interest rates could rise by the end of the year.
The S&P fell 1.2 percent and posted gains in 11 of the past 12 weeks, largely led by technology stocks. Less affected by technology stocks, the Dow Jones rose 48 points, or 0.1 percent, in afternoon trading. The Nasdaq composite fell 1.8 percent. Stocks also fell in Europe.
The Australian share market is poised to rise, with futures pointing to a gain of 37 points, or 0.4 per cent, at the open. The ASX lost 0.3 per cent on Tuesday as a decline in technology shares weighed on Asian markets. South Korea’s Kospi index, the biggest winner of the AI boom, fell 10 percent. The Australian dollar weakened to 69.21¢.
Wall Street is heavily targeting companies that have seen their values soar amid the frenzy for AI technology. Expensive stock valuations give them more influence over the direction of the broader market. U.S. stocks were strengthening rather than falling in the S&P 500, but tech companies were outpacing gains elsewhere.
Micron Technology fell 12.7 percent and Nvidia fell 3.4 percent. Samsung Electronics lost 12.3 percent of its value in South Korea.
SpaceX fell in early trading but rose 2.2 percent late in the session. The space exploration and artificial intelligence company entered a booming market less than two weeks ago. The company plans to raise money through a bond offering, in part to finance its AI development.
The increasing likelihood of interest rate hikes later this year has helped dampen a recent big rally in artificial intelligence-related stocks as investors worry that higher interest rates could hinder economic growth.
These Big Tech gains were significant, causing major indices to set records through 2026. Within the S&P 500, only the technology sector increased by 26 percent in the last three months and approximately 17 percent throughout the year. In Asia, South Korea’s Kospi index has nearly doubled so far in 2026, even after Tuesday’s decline.
Analysts warn that soaring tech stocks may be on the verge of a downturn.
“Viewed through this lens, a period of consolidation is reasonable in our view after such a sharp rise,” Edward Jones investment strategy analyst Brock Weimer wrote in a research note.
Many technology companies are spending heavily on artificial intelligence technology. The potential for higher interest rates could inhibit future spending and harm investment prices. The Federal Reserve has signaled that it may raise interest rates at least once before the end of the year. Wall Street sees an 85 percent chance that the central bank will raise its benchmark interest rate this year. This was up 60 percent from a week ago.
The yield on the 10-year Treasury note fell to 4.49 percent from 4.51 percent at the end of Monday. The yield on the 2-year Treasury note fell to 4.19 percent from 4.24 percent at the end of Monday. However, bond yields remain high due to inflation concerns.
Inflation has been rising throughout the year. The impact of the tariffs helped halt and reverse the easing of inflationary growth. The US war with Iran has skyrocketed energy prices, including gas prices. High energy costs have also made shipping more expensive for a wide range of products, putting pressure on businesses and households. The report on the Fed’s preferred measure of inflation, to be released on Thursday, is expected to show inflation rose to 4.1 percent in May.
Oil prices declined due to the negotiations between the USA and Iran to end the war. The barrel price of US crude oil fell 1 percent to $73.09. The barrel price of Brent crude oil, the international standard, decreased by 0.7 percent to $76.97. Prices are still higher than they were at around $70 per barrel before the war began.
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