Wall Street mixed, ASX set to slip; Warsh narrowly confirmed as new Fed chair
Stan Choe
Updated ,first published
Although the majority of U.S. stocks fell following another discouraging update on inflation, a rebound in technology stocks sent Wall Street to record highs on Wednesday.
The S&P 500 rose 0.6 percent, reaching its all-time high at the beginning of the week. The Dow Jones Industrial Average fell 67 points, or 0.1 percent, while the Nasdaq composite broke its own record after rising 1.2 percent.
The Australian share market is poised for a decline, with futures pointing to a decline of 24 points, or 0.3 per cent, at the open at 6.08am AEST. The ASX lost 0.5 per cent on Wednesday as bank shares fell following the announcement of the federal budget. The Australian dollar was trading at ¢72.57 at 6.39am AEST.
The Federal Court will announce its decision this morning in the ACCC’s case against Coles; The supermarket giant has been accused of misleading customers about prices with its “Down Down” promotions.
Gains in Wall Street’s technology stocks led the way; 4.8 percent of Micron Technology and 11.1 percent of On Semiconductor. They had stumbled a day earlier after momentum for stocks that had been fueling excitement around artificial intelligence technology came to an abrupt halt.
Nvidia, the chip company among the early faces of the AI boom, rose 2.3 percent and was the strongest force pushing the S&P 500 upward due to its massive size. CEO Jensen Huang has received an invitation to join President Donald Trump on a trip to China, where they could discuss allowing Nvidia AI chips to be shipped to the world’s second-largest economy.
Meanwhile, the Senate narrowly confirmed Kevin Warsh as Federal Reserve chairman, setting off the most contentious leadership transition at the U.S. central bank in decades and a test of its political independence.
Wednesday’s 54-45 vote was the slimmest margin of approval ever for a central bank governor; This reflected polarized politics in Congress and Democrats’ fears that Warsh would bow to President Donald Trump’s demands to quickly lower interest rates.
Japan’s SoftBank Group said its profits in the 12 months to March rose almost fivefold from the previous year as its investments in artificial intelligence paid off. China’s Alibaba Group said its artificial intelligence and cloud growth accelerated in the latest quarter and its U.S.-listed shares rose 8.2 percent, even though its overall results fell short of analysts’ expectations.
But the majority of stocks outside the tech sector fell as pressure mounted on Wall Street.
“Corporate earnings and AI momentum are acting as the market’s main shock absorbers, but the path is getting significantly tougher,” said Tim Waterer, chief market analyst at KCM Trade.
A report released Wednesday showed that U.S. wholesale inflation was much worse than economists expected last month. This follows a report on Tuesday showing inflation is accelerating at the US consumer level.
Prices of fuel, transportation and all kinds of other things are increasing due to tariffs, bad weather affecting food prices and other reasons. But chief among them is the increase in oil prices created by the war with Iran, which has slowed the global flow of crude oil to customers around the world.
On Wednesday, oil prices moved more moderately after big gains earlier in the week, with the price of a barrel of Brent crude falling 2 percent to settle at $105.63.
But it remains well above its pre-war price of roughly US$70, and worldwide oil stocks are being depleted at a record pace, the International Energy Agency said Wednesday. The resulting rise in oil prices caused investors to lose most of their hopes that the Fed would cut interest rates this year. On the contrary, after no change in interest rates this year, raising interest rates looks like the next best bet.
Wall Street generally likes low interest rates because they provide a boost to the economy by making mortgages and other loans cheaper. They can also push up stock prices and all kinds of other investments, but the downside is that they can make inflation worse.
The yield on the 10-year Treasury note rose to 4.47 percent from 4.46 percent late Tuesday, well above its pre-war level of 3.97 percent.
The rise in yields helped drive stocks of utilities and real estate owners from some of the sharper losses in the S&P 500. Such companies tend to pay relatively large dividends, and when bonds pay more interest, they become less attractive to income-seeking investors.
American Electric Power fell 3 percent after announcing a $2.6 billion ($3.6 billion) share offering.
Elsewhere on Wall Street, Birkenstock Holding fell 12.9 percent after the British company said its latest quarter results were negatively affected by US tariffs and other factors.
Overall, the S&P 500 rose 43.29 points to 7,444.25. The Dow Jones Industrial Average fell 67.36 to 49,693.20, and the Nasdaq composite index rose 314.14 to 26,402.34.
Indices on stock markets abroad rose in most of Europe and Asia.
South Korean Kospi led the way with an increase of 2.6 percent. It had lost 2.3 percent of its value the previous day after a senior administration figure suggested that the government could redistribute windfall artificial intelligence profits from companies to citizens. This dampened the momentum of AI stocks around the world on Tuesday.
South Korean Kospi led the way with an increase of 2.6 percent. It had lost 2.3 percent of its value the previous day after a senior administration figure suggested that the government could redistribute windfall artificial intelligence profits from companies to citizens. This dampened the momentum of AI stocks around the world on Tuesday.
access point
The Market Summary newsletter is a summary of the day’s transactions. Let’s each take ittoday afternoon.
