Source : the age
The US stock market inched to more records as winners of the artificial-intelligence boom kept driving higher.
The S&P 500 rose 0.1 per cent after drifting between small gains and losses through the day. The Dow Jones Industrial Average added 228 points, or 0.4 per cent, and the Nasdaq composite edged up by less than 0.1 per cent. All three set all-time highs.
The Australian sharemarket is set to rise, with futures at 6.27am AEST pointing to a gain of 25 points, or 0.3 per cent, at the open. The ASX dipped lower on Tuesday. The Australian dollar was trading at US71.81¢.
Hewlett Packard Enterprise helped lead Wall Street, and its stock soared 19.5 per cent after it reported a profit for the latest quarter that blew past analysts’ expectations. It credited demand from customers building their artificial-intelligence capabilities.
Marvell Technology leaped 32.5 per cent for its best day since its stock began trading in 2000 after Nvidia’s CEO, Jensen Huang, suggested at a conference in Taiwan that Marvell could be “the next trillion-dollar company.” The last company to enter the expanding club of behemoths was Micron Technology, which is likewise riding the AI wave. Nvidia, which slipped 0.7 per cent, has seen its total value top $US5 trillion ($7 trillion).
Generac climbed 5.7 per cent after saying it signed a deal to provide backup power generators to an unnamed “leading hyperscale data centre operator.”
Such “hyperscalers” are spending tremendous amounts of money to build huge AI data centers, which are powering what proponents believe is the next great revolution for the global economy.
Alphabet is one of those hyperscalers, and the parent company of Google said it’s raising $US80 billion in cash to help pay for its investments by selling shares of its stock. It’s planning to spend as much as $US190 billion on equipment and other investments this year.
That’s more than all the stock of The Walt Disney Co. is worth, and Alphabet is forecasting its spending on investments next year will “significantly increase.”
Such huge sums raise the question about whether AI can produce the profits and productivity necessary to make all the investment worth it. Critics have already been talking about the possibility of a bubble in AI investment, and Alphabet’s stock fell 3.9 per cent. It was one of the heaviest weights on the S&P 500.
Souring Bitcoin sentiment has triggered almost $US1.5 billion in crypto liquidations over the past 24 hours, as the largest digital asset sank back to a two-month low.
This forced deleveraging — the automatic, mandatory closure of high-risk trades by crypto exchanges — is the largest volume seen since February, according to data compiled by CoinGlass. Almost $US800 million positions in Bitcoin were wiped out.
Bitcoin slipped as much as 7 per cent to below $US67,000 for the first time since April as lingering concern about the conflict in Iran and selling by major holder Strategy continued to dent investor appetite. The price of the token is down almost 50 per cent from an all-time high of around $US126,000 reached in October.
All told, the S&P 500 rose 9.82 points to 7,609.78. The Dow Jones Industrial Average gained 228.91 to 51,307.79, and the Nasdaq composite inched up 7.09 to 27,093.90.
Analysts have been saying the broad US stock market may be set for a slowdown following an unrelenting streak of nine straight winning weeks for the S&P 500, its longest since 2023. The rally has been largely due to strong profit reports from US companies, as well as hopes that the United States and Iran will reach a deal to reopen the Strait of Hormuz. That would allow oil to flow freely again from the Persian Gulf and hopefully lower its price.
In the oil market, prices rose again to claw back more of last week’s slump. Brent crude oil, the international standard, climbed 1.1 per cent to settle at $US96.00 per barrel, and it’s still well above its roughly $US70 level from before the war.
In the bond market, Treasury yields were relatively steady.
The yield on the 10-year Treasury slipped to 4.45 per cent from 4.47 per cent late on Monday. It briefly jumped after a report said that US employers were advertising many more jobs at the end of April than economists expected, a potential signal of continued health for the US labor market. But it quickly pulled back to where it was just before the report’s release.
High yields worldwide recently have threatened to slow economies and undercut prices for stocks and all kinds of other investments. They have already forced the average long-term US mortgage rate to its most expensive level in nine months, and they could curtail companies’ borrowing to build the AI data centres that have supported the US economy’s growth recently.
In stock markets abroad indexes rose across much of Europe and Asia.
Hong Kong’s Hang Seng jumped 2.5 per cent for one of the world’s biggest moves.
