Opening Call: The Australian share market is to open higher.
A massive rally in Nvidia shares lifted technology stocks, while the blue-chip Dow industrials ended slightly lower. Treasury yields rose as traders priced in a greater chance of further interest-rate increases by the Federal Reserve through July. Oil prices fell after a top Russian official reportedly downplayed rumors of production cuts from OPEC+. Dollar strength pushed gold prices lower.
Australia’s S&P/ASX 200 ended nearly 1.1% lower as strength in technology stocks was offset by widespread losses elsewhere.
Nvidia’s breakout first-quarter results lifted tech stocks despite surging bond yields. The chip maker’s strong outlook came from the booming demand for artificial intelligence, and boosted the Nasdaq Composite to a 1.7% gain with its own 24% rise. “What is the oil of the future? Semiconductors,” said Michelle Cluver, a portfolio strategist at Global X. “Artificial intelligence is a major theme driving markets right now.” Chip makers tied to the AI-frenzy rose across the board.
While shares of information-technology firms shot 4.5% higher-the sector’s biggest one-day pop since November-none of the 10 remaining sectors in the S&P 500 gained more than a half percentage point. The S&P 500 still managed to rise 0.9%, though the Dow Jones Industrial Average slipped 0.1% for its fifth consecutive session of losses.
Gold and silver futures ended lower for a fourth consecutive session, with prices for both metals settling at their lowest since late March as Fitch Ratings’ decision to put the U.S.’s AAA credit rating on notice helped boost the U.S. dollar. Gold futures for June delivery declined by 1.1% to settle at $1,943.70 per ounce on Comex, according to FactSet data. July silver declined 1.4% to end at $22.91 per ounce.
“The debt-ceiling drama is getting most of the attention, but a hawkish shift in tone by a list of Fed officials recently has holstered the dollar and sent policy-sensitive rates (beyond those durations reacting to the debt negotiations) higher,” analysts at Sevens Report Research wrote.
Oil futures finished lower for the first time in four sessions after a top Russian official played down the prospect of additional production cuts when OPEC+ meets early next month. Traders said the comments, and oil’s bearish reaction to them, were a gut-punch for many investors who saw yesterday’s massive 12.5 weekly drawdown in U.S. crude-oil inventories and thought oil prices were off to the races West Texas Intermediate crude for July delivery fell 3.4% to settle at $71.83 a barrel on the New York Mercantile Exchange. July Brent crude lost 2.7% at $76.26 a barrel on ICE Futures Europe.
Earlier Thursday, Chinese shares ended lower, with market sentiment weighed by negative factors including China’s weak economic recovery, worries over local government debt and a stalemate in the U.S. debt-ceiling talks. The Shanghai Composite Index lost 0.1%. The Shenzhen Composite Index dropped 0.2% and the ChiNext Price Index was almost 0.1% lower.
Hong Kong’s Hang Seng Index gave up 1.9% amid the concerns over China’s weak economic recovery, its long-term growth and the stalemate in the U.S. debt-ceiling talks. Japan’s Nikkei Stock Average rose 0.4%, led by semiconductor- and electronics-related companies following Nvidia’s after-market earnings and guidance.