United States
Wall Street’s great tech unwind gathered pace overnight as investors continued their mass exodus from the sector that had anchored portfolios during uncertain times, pivoting instead towards companies poised to benefit from improving economic conditions.
The S&P 500 slipped 0.5 per cent to 6,905, while the tech-heavy Nasdaq 100 tumbled 1.8 per cent to record its worst two-day selloff since October, breaching its 100-day moving average in a move some technical analysts view as a warning sign. The Dow Jones Industrial Average bucked the trend, adding 0.6 per cent to 49,551.
Chipmaker Advanced Micro Devices bore the brunt of investor anxiety, plunging 17 per cent after its outlook disappointed and stoked fresh concerns about the trajectory of artificial intelligence spending. The carnage rippled through the semiconductor sector, which shed 4.4 per cent on the session. Nvidia briefly dropped more than 4 per cent before paring losses.
Software stocks extended their brutal run as fears about AI disruption continued to weigh. The sector has now tumbled more than 25 per cent since reaching record highs in October, with short sellers pocketing paper gains of US$24 billion according to S3 Partners data.
Yet beneath the headline numbers, a healthier picture emerged. An equal-weighted version of the S&P 500 climbed 0.9 per cent, suggesting the selling pressure remains concentrated rather than systemic. The rotation narrative found support in value stocks outpacing growth names, while US service providers reported their strongest back-to-back expansion since 2024.
After the closing bell, Google parent Alphabet delivered solid quarterly results with cloud revenue surging 48 per cent to US$17.7 billion. However, a capex guidance of US$175 billion to US$185 billion for 2026 initially spooked investors, coming in well above expectations of around US$120 billion. Shares recovered in extended trading as the market digested what the aggressive spending signals about AI demand.
Elsewhere, Nvidia is reportedly nearing a US$20 billion investment in OpenAI, while Texas Instruments agreed to acquire Silicon Laboratories for US$7.5 billion to deepen its exposure to industrial and medical device chips.
Europe
European equities finished essentially flat, with the Stoxx 600 edging up just 0.03 per cent as the rotation theme played out across the continent.
Technology stocks bore the heaviest losses, shedding 2.5 per cent as ASML, Prosus and ASM International all retreated sharply. Software companies and advertising agencies continued to be punished on fears that AI tools will cannibalise their business models.
Chemicals emerged as the standout performer, surging 4.8 per cent to a five-month high. Air Liquide and BASF led gains after reports emerged that the European Commission may soften its climate protection programme. The automotive sector also impressed, climbing 3.6 per cent with Mercedes-Benz and BMW among the biggest advancers.
Healthcare saw wild swings in both directions. Novo Nordisk collapsed 17 per cent after forecasting a steep decline in sales this year as cheaper obesity drugs flood the market. The Danish pharmaceutical giant’s chief executive urged investors to stick with the company, promising a prescription surge would eventually revive growth. GSK provided an antidote, rallying 6.9 per cent after vaccine sales drove a profit beat.
Banks pulled back from their highest levels since 2008, with UBS sliding 6.3 per cent after warning of continued headwinds in its US wealth management business.
Australia
Australian shares are poised for a subdued start to Thursday’s session, with S&P/ASX 200 futures pointing 0.2 per cent lower to 8,878.
Beach Energy will be in the spotlight after reporting an 8 per cent decline in underlying net profit to $219 million for the December half, weighed down by flooding in its Cooper Basin operations. The oil and gas producer slashed its interim dividend to 1 cent per share from 3 cents a year earlier, though chief executive Brett Woods described the result as solid and flagged an active second half as production ramps up from the Waitsia gas project.
Rio Tinto remains in focus amid reports the mining giant wants its chief executive and chairman to retain their roles in any potential combination with Glencore. BHP’s American depositary receipts dipped 0.7 per cent overnight.
Bond yields ticked higher, with the three-year rising 3.9 basis points to 4.35 per cent and the ten-year adding 3.2 basis points to 4.87 per cent.
On the economic calendar, December trade data lands at 11.30am. The Bank of England and European Central Bank both hold policy meetings tonight and early Friday respectively, with both expected to keep rates steady.
Commodities and currencies
Oil prices advanced amid conflicting reports about US-Iran nuclear talks that clouded the geopolitical outlook. Brent crude gained 1.7 per cent to US$68.49 a barrel, while West Texas Intermediate rose to US$64.31.
Gold eased 0.1 per cent to US$4,941 an ounce as traders booked profits following its recent surge towards US$5,000. Iron ore added 0.2 per cent to US$102.15 a tonne. Copper slipped as rising stockpiles in London Metal Exchange warehouses refocused attention on soft Chinese demand.
The Australian dollar weakened 0.3 per cent to 69.98 US cents as the greenback strengthened broadly. Bitcoin tumbled 2.7 per cent to US$73,546, with prediction markets now implying an 82 per cent chance the cryptocurrency falls to US$65,000 this year.
Economic Calendar
AU:
- Trade Balance Dec 11:30
US:
- Initial Jobless Claims Jan 00:30
This article was written by Calvin Curdie, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
