Wall Street jumps on inflation update, ASX set to rise
Staff writers
Updated ,first published
The Australian share market rose in early trade, supported by banks and technology stocks, after positive news on inflation helped lift US shares overnight.
The ASX 200 was up 0.7 per cent in early trade, with nine of the market’s 11 sectors trading in the green. The gains came after the S&P 500 rose 0.8 percent, breaking a four-day losing streak, helped by inflation figures that raised interest rate cut hopes.
All the major banks that have a significant impact on the stock market were trading in positive territory, driven by positive investor sentiment. Industry giant Commonwealth Bank was up 1.2 per cent, Westpac was up 1.6 per cent, National Australia Bank was up 1.5 per cent and ANZ Bank was up 1 per cent.
Macquarie Group rose 1.6 per cent after the corporate watchdog accepted a $35 million fine to settle a lawsuit, while insurers were also higher.
Technology was the strongest sector, with WiseTech rising 2 per cent after the company announced it would not take further action against founder Richard White following the completion of an investigation into the billionaire in 2024 following a series of allegations.
Accounting software group Xero also posted gains of 2.1 per cent, while TechnologyOne (up 0.5 per cent), NextDC (up 1 per cent) and Life360 (up 0.9 per cent) also reported gains.
Mining stocks were mixed; Iron ore giants BHP (down 0.2%) and Fortescue (down 1.2%) fell, while Rio Tinto rose 0.3%. Energy was the weakest sector on the ASX; Woodside fell 0.4 percent and Santos fell 0.9 percent.
The Australian dollar traded at US66.13¢ at 23:12 AEDT.
TikTok has signed a deal to sell its US business to three American investors – Oracle, Silver Lake and MGX, allowing the popular social video platform to continue operating in the US.
50 percent of the new TikTok US joint venture will be held by a consortium of new investors, including Oracle, Silver Lake and MGX, with 15 percent each. Another 30.1 percent will be held by affiliates of existing ByteDance investors and 19.9 percent will be held by ByteDance, according to the notice.
On Wall Street, some relief was brought by a report showing inflation was less bad than economists expected last month. That could calm the nerves of the Fed, which is responsible for keeping inflation low and the job market strong.
Inflation, at 2.7 percent last month, is still higher than anyone expected, but if it moves closer to the Fed’s 2 percent target, Fed officials may feel freer to cut interest rates to help the slowing job market. Wall Street likes low rates because they can boost the economy and investment prices even if they worsen inflation.
Of course, some on Wall Street said Thursday’s inflation update might not have much impact on the Fed’s standing, given the noisy economic reports that followed the earlier U.S. government shutdown. Next month’s update on inflation could provide a better indication of what’s actually happening. But a better-than-expected inflation report is still better than the alternative.
Micron Technology, a vendor of memory and storage for computers, also helped lift the U.S. stock market, gaining 10.2 percent in the latest quarter after a better-than-expected profit and revenue report. CEO Sanjay Mehrotra said each of the company’s business units is generating stronger revenue, generating more profit on every $1 of that revenue.
Micron also gave profit and revenue forecasts that beat analysts’ expectations, and Mehrotra praised its position as an “AI enabler” among other things.
Billions of dollars are pouring into artificial intelligence technology that has helped superstar stocks like Nvidia lead the market for years.
But questions are rising about whether stock prices have risen too much and whether customers will be able to get a good enough return on their AI investments through higher profits and productivity. Companies that have taken on a lot of debt amid the AI craze are also worried.
Oracle and Broadcom have been at the center of such concerns lately, with their stock prices falling sharply since last week even though both reported better profits than analysts expected in the latest quarter. On Thursday, Oracle rose 0.9 percent and Broadcom rose 1.1 percent.
Nvidia, Wall Street’s most influential chip company due to its enormous size, gained 1.8 percent.
Another winner was Trump Media & Technology Group, which gained 41.9 percent, recouping some of its big loss of the year so far and entered the day with 69.3 percent. The company, which started with President Donald Trump’s Truth Social platform and later moved into cryptocurrencies and various other businesses, is now diving into nuclear energy.
It is merging with TAE Technologies in an all-stock deal, and each company will own about half of the combined business. The companies said the deal will pair TMTG’s ability to attract investors and raise significant funds with TAE technology. They hope to commercially operate TAE’s nuclear fusion reactors that will produce energy similar to the sun.
In foreign stock markets, after the Bank of England cut interest rates and the European Central Bank remained stable, indices rose by 0.6 percent in London, 0.8 percent in France and 1 percent in Germany.
