Wall Street steadies, ASX set to climb
Stan Choe
Updated ,first published
U.S. stocks were flat on Friday after an encouraging update on inflation helped calm Wall Street, which has been rattled by concerns about how artificial intelligence technology could disrupt business.
The S&P 500 was barely budged, a day after suffering one of its worst losses since Thanksgiving. The Dow Jones rose 48 points, or 0.1 percent, and the Nasdaq composite fell 0.2 percent.
The Australian share market is poised for a rally, with futures pointing to a 51-point, or 0.6 percent, rise at the open. The reporting season continues with Treasury Wine and JB Hi-Fi among the companies due. The Australian dollar was trading at 70.72¢ at 5.14am AEDT.
Bendigo and Adelaide Bank’s profits fell 3.3 per cent to $256.4 million in the first half as the bank’s revenue rose but operating expenses also increased. It kept the dividend steady at 30 cents per share.
Australian steelmaker Bluescope reported an 81 percent increase in December profits to $558 million after President Trump increased US steel tariffs, leading to “stronger US steel spreads” for products produced in the US. This offset the weak performance of domestic steel production in Australia and Asia, competing against the steel glut in China.
The steelmaker, which is the target of a takeover bid by Kerry Stokes SGH and US-based Steel Dynamics, also announced it will deliver $3 per share to investors this calendar year through a special dividend of $1 per share, $1.30 per share from ongoing dividends and a $310 million market buyback worth about 70 cents per share.
Wall Street stocks got some help from lower Treasury yields, which fell last month following a report showing inflation slowing more than economists expected. U.S. consumers paid 2.4 percent higher prices for food, clothing and other living expenses than a year ago.
While that was higher than anyone would have wanted and above the 2 percent target set by the Federal Reserve, it wasn’t as bad as December’s rate of 2.7 percent. And a key measure of inflation that economists view as a better predictor of where inflation might go has slowed to the least painful level in about five years.
“That’s still very high, but just for now, not forever,” said Brian Jacobsen, chief economic strategist at Annex Wealth Management.
In addition to helping U.S. households keep up with the cost of living, slowing inflation could also give the Federal Reserve more leeway to cut interest rates when necessary. The Fed has suspended interest rate cuts, but the widespread expectation is that they will continue later this year.
Lowering rates would provide a boost to the economy and lead to juice prices for stocks. What’s holding the Fed back from cuts is that they could provide more fuel for inflation.
Meanwhile, the economy appears to be in a better place than at the end of 2025. In addition to the slowdown in inflation, the employment market also improved more than economists expected last month.
On Wall Street, stock prices of many companies that investors had previously targeted as potential losers from the AI disruption were steady.
AppLovin, for example, lost nearly a fifth of its value on Thursday despite reporting stronger profits than analysts expected. Investors worry that it and other software companies will see their AI-powered rivals take away customers and fundamentally change their industries.
On Friday, AppLovin was up 6.4 percent.
Trucking and shipping companies also tumbled on Thursday after small company Algorhythm Holdings said its artificial intelligence platform helps customers scale freight volumes by up to 400 percent “without a corresponding increase in operational headcount.” CH Robinson Worldwide, which lost 14.5 percent in value on Thursday, rose 4.9 percent on Friday.
Such declines have been common in the market lately, targeting industries that investors have judged to be under threat of disruption from artificial intelligence. The reactions were so aggressive and rapid that analysts likened it to a “shoot first, ask questions later” mentality.
Applied Materials became the strongest rising force in the S&P 500 after rising 8.1 percent. The company, whose products help make chips and displays, reported stronger profits than analysts expected in its latest quarter. CEO Gary Dickerson noted that “industry investments in AI computing are accelerating.”
On Wall Street’s losing side was DraftKings, whose earnings in the last quarter fell 13.5 percent, although it was above analysts’ expectations. This year’s revenue forecast fell short of expectations.
After replacing its CEO, Norwegian Cruise Line Holdings lost 7.6 percent of its value just weeks before it announced its latest quarterly results. The cruise ship operator said company executive John Chidsey, formerly CEO of Subway Restaurants, has replaced Harry Sommer, effective immediately.
The heaviest weight in the market was Nvidia, down 2.2 percent. Because it’s the largest stock on Wall Street, its moves carry more weight in the S&P 500 than those of other companies.
Overall, the S&P 500 index rose 3.41 points to 6,836.17 points, ending its worst week since November. The Dow Jones Industrial Average increased by 48.95 to 49,500.93, and the Nasdaq composite index decreased by 50.48 to 22,546.67.
In the bond market, the yield on the 10-year Treasury note fell to 4.05 percent from 4.09 percent at the end of Thursday. The yield on the two-year Treasury note, which more closely tracks expectations for Fed action, fell further. It decreased from 3.47 percent to 3.40 percent.
While foreign stock exchange indices fell in Asia, they followed a more mixed course in Europe. Hong Kong’s Hang Seng index fell 1.7 percent and Japan’s Nikkei 225 index fell 1.2 percent due to two big moves.
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