The markets biggest technology shares fell, with Wisetech (down 2.8 per cent), Xero (down 2.5 per cent) and TechnologyOne (down 1.5 per cent) all losing ground.
Overnight, the S&P 500 added 0.4 per cent, but only after jumping towards one of its biggest gains since summer, erasing it all and then climbing back.
The Nasdaq composite climbed 0.7 per cent after earlier pinballing between a drop of 0.4 per cent and a rally of 1.4 per cent. The Dow Jones Industrial Average lagged the market and edged down by 17 points, or less than 0.1 per cent.
Futures were pointing to the S&P/ASX 200 opening 5 points of 0.1 per cent high on Thursday, after the market rose 1 per cent on Wednesday, helped by a rally in mining and banking shares. The Australian dollar was trading at US65.08¢ at 6.45am AEDT.
The erratic trading in the US overnight followed Tuesday’s roller coaster, where the Dow careened between a loss of 615 points and a jump of 455. The dizzying moves go back to the end of last week, when US President Donald Trump shattered what had been a remarkably calm and strong run for Wall Street by threatening much higher tariffs on China.
Technology stocks helped lead the way on Wednesday following a better-than-expected profit report from ASML, a major supplier to the semiconductor industry. It expects its revenue for 2025 to be 15 per cent above last year’s, while next year’s should be at least as high as this year’s.
Loading
“On the market side, we have seen continued positive momentum around investments in AI,” chief executive Christophe Fouquet said, “and have also seen this extending to more customers”. That’s key when worries have been high that a bubble may be forming in artificial-intelligence technology, with too much investment flowing in akin to the 2000 dotcom frenzy.
ASML’s stock climbed 3.1 per cent in Amsterdam. On Wall Street, Broadcom rose 2.7 per cent and Advanced Micro Devices jumped 9.1 per cent and were the two strongest forces lifting the S&P 500.
Several big banks also drove the market higher. Bank of America climbed 4.4 per cent after delivering a profit for the latest quarter that was stronger than analysts expected. Chief executive Brian Moynihan said every line of the bank’s business reported growth.
Morgan Stanley rose 4.8 per cent after, likewise, reporting a stronger profit than analysts expected. That followed better-than-expected profit reports from several banks the day before, including JPMorganChase and Wells Fargo.
They helped offset a 3.9 per cent drop for PNC Financial. It reported a stronger-than-expected profit for the latest quarter, but it also gave a forecast for upcoming earnings that some analysts said was below expectations.
Abbott Laboratories sank 2.4 per cent after its revenue for the latest quarter finished just shy of analysts’ expectations.
All told, the S&P 500 rose 26.75 points to 6671.06. The Dow slipped 17.15 to 46,253.31, and the Nasdaq composite climbed 148.38 to 22,670.08.
Companies are under pressure to deliver strong profits after their stock prices broadly surged 35 per cent from a low in April. To justify those gains, which critics say made their stock prices too expensive, companies will need to show they’re making much more in profit and will continue to do so.
Loading
Corporate profit reports are also under more scrutiny than usual as investors hunt for clues about the health of the US economy. That’s because the US government’s latest shutdown is delaying important updates on the economy, such as the report on inflation that was supposed to arrive on Wednesday.
The lack of such reports is making the job more difficult for the Federal Reserve, which is trying to figure out whether high inflation or a slowing job market is the bigger problem for the economy.
The Fed cut its main interest rate last month for the first time this year, and officials indicated more may be on the way to give the job market a boost. But too-low interest rates can push upwards on inflation, which has remained stubbornly stuck above the Fed’s 2 per cent target.
Comments from the Fed’s chair, Jerome Powell, on Tuesday may have hinted more cuts to rates may be on the way.
