ASX set to fall, Wall Street drifts lower; $A slumps

The Age

4 days ago

US stock indexes are drifting on Monday after the United States agreed to tax cars and other products coming from the European Union at a 15 per cent rate, lower than President Donald Trump had earlier threatened. Many details are still to be worked out, though, and Wall Street is heading into a week full of potential flashpoints that could shake markets.
The S&P 500 fell 0.2 per cent in afternoon trading after setting an all-time high every day last week. The Dow Jones was 142 points, or 0.3 per cent, and the Nasdaq composite was 0.2 per cent higher, coming off its own record. The Australian sharemarket is set to fall, with futures at 4.53am AEST pointing to a fall of 69 points, or 0.8 per cent, at the open. The ASX added 0.4 per cent on Monday.
The Australian dollar was 0.8 lower to 65.16 US cents at 5.08am.
On Wall Street, Tesla added 3.4 per cent after its CEO, Elon Musk, said it signed a deal with Samsung Electronics that could be worth more than $US16.5 billion ($25.3 billion) to provide chips for the electric-vehicle company. Samsung's stock in South Korea jumped 6.8 per cent.
Other companies in the chip and artificial-intelligence industries were strong, continuing their run from last week after Alphabet said it was increasing its spending on AI chips and other investments to $US85 billion this year. Chip company Advanced Micro Devices rose 4 per cent, and server-maker Super Micro Computer climbed 8.6 per cent.
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They helped offset a 8 per cent drop for Revvity. The company in the life sciences and diagnostics businesses reported a stronger profit for the latest quarter than Wall Street expected, but its forecast for full-year profit disappointed analysts.
Companies are broadly under pressure to deliver solid growth in profits following big jumps in their stock prices the last few months. Much of the gain was due to hopes that Trump would walk back some of his stiff proposed tariffs, and critics say the broad US stock market looks expensive unless companies produce bigger profits.
More fireworks may be ahead this week. 'This is about as busy as a week can get in the markets,' according to Chris Larkin, managing director, trading and investing, at E-Trade from Morgan Stanley.