ASX set for gains, AI stocks weigh on Wall Street; $A drops
The S&P 500 slipped 0.7 per cent and is on track for a third straight modest loss after setting its all-time high last week. The Dow Jones Industrial Average was down 70 points, or 0.2 per cent, in mid-afternoon trade, and the Nasdaq composite was down 1.4 per cent.
The Australian sharemarket is set to rise, with futures at 4.58am AEST pointing to a gain of 20 points, or 0.2 per cent, at the open. The ASX lost 0.7 per cent on Tuesday. The Australian dollar lost ground. It was 0.6 per cent lower at US64.51¢ at 5.10am. Reporting season continues with Transurban and Stockland among those due up.
The heaviest weight on Wall Street was Nvidia, whose chips are powering much of the move into AI. It sank 3 per cent.
Another AI darling, Palantir Technologies, dropped 9.2 per cent for the largest loss in the S&P 500. It has seen bets build up sharply among investors this year that its stock price will drop, according to S3 Partners. Only Meta Platforms has seen a bigger increase in what's called 'short interest,' where traders essentially bet a stock's price will fall. Meta, the owner of Facebook and Instagram, fell 1.7 per cent.
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Criticism has been rising that stock prices have shot too high, too fast and have become too expensive.
One way companies can make their stock prices look less expensive is to deliver solid growth in profits. Palo Alto Networks climbed 4.7 per cent after reporting earnings and revenue for the latest quarter that topped analysts' expectations. The cybersecurity company also gave forecasts for profit and revenue in its upcoming fiscal year that were above Wall Street's.
Home Depot's rise of 2.7 per cent, meanwhile, was the biggest reason the Dow was doing better than other indexes. The Dow had been flirting earlier in the morning with its own record, which was set in December.
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