ASX pares gains after inflation data; Tech stocks climb after Wall Street rally
On the flip side, all big four banks were trading lower after the inflation data. CBA, the biggest lender and also the biggest stock on the ASX, swung into the red and was down 0.2 per cent. NAB and ANZ Bank both shed 0.6 per cent, and Westpac dropped 0.5 per cent.
Mining heavyweights BHP and Rio Tinto also fell 0.4 per cent and 0.5 per cent, respectively, as iron ore prices retreated overnight. Telstra's shares lost 0.3 per cent after UBS rescinded its buy rating, saying the stock was trading at a fair price after its 15 per cent rally over the past six months.
The ASX added 0.6 per cent on Tuesday, followed by a 2 per cent leap in Wall Street's S&P 500 overnight in its first trading session since Trump said on Sunday he would delay a 50 per cent tariff on imports from the European Union until July 9. The EU's chief trade negotiator later said on Monday that he had 'good calls' with Trump officials and Europe was 'fully committed' to reaching a trade deal by July 9.
The Dow Jones jumped 1.8 per cent, and the Nasdaq composite rallied 2.5 per cent. They more than recovered their losses from Friday, when Wall Street's rollercoaster dropped after Trump announced the tariffs on France, Germany and the other 25 countries represented by the European Union.
Such talks give hope that the United States can reach a deal with one of its largest trading partners that would keep global commerce moving and avoid a possible recession. Trump declared a similar pause on his stiff tariffs for products coming from China earlier this month, which launched an even bigger rally on Wall Street at the time.
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'We focus on actions over words,' Jean Boivin and other strategists at BlackRock Investment Institute said, 'as economic constraints spur policy rollbacks.'
Caution still remains on Wall Street, of course, even if the S&P 500 has climbed back within 1.91 per cent of its record after falling roughly 20 per cent below the mark last month.
A worry is that all the uncertainty caused by on-again-off-again tariffs could damage the economy by pushing US households and businesses to freeze their spending and investments.
On Tuesday, though, optimism ruled. The US market's gains accelerated after a report released by the Conference Board said confidence among consumers improved by more in May than economists expected. It was the first increase in six months. About half the survey results came after Trump paused some of his tariffs on China.
Looking at individual stocks, Trump Media & Technology, the company behind Truth Social, announced it was aiming to buy $US2.5 billion ($3.9 billion) of bitcoin for its treasury. The company said it had agreed to sell around $US1.5 billion in stock and $US1 billion in convertible bonds to finance the move.
The company's shares slumped 10.4 per cent after rallying premarket following a Financial Times report on its plans to raise capital to spend on cryptocurrencies. Trump Media will add Bitcoin to its balance sheet along with its current cash, cash equivalents and investments, which were worth $US759 million at the end of the first quarter, according to a filing on Tuesday.
Informatica climbed 6 per cent after Salesforce said it would buy the AI-powered cloud data management company in an all-stock deal valuing it at about $US8 billion. Salesforce rose 1.5 per cent.
In the bond market, Treasury yields eased to take some of the pressure off the stock market. The yield on the 10-year Treasury fell to 4.44 per cent from 4.51 per cent late Friday. It had been rising last week, in part because of worries about the US government's rapidly increasing debt.
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