United States
Wall Street staged its most impressive comeback since May on Friday, shaking off the technology sector carnage that had gripped markets earlier in the week. The S&P 500 climbed 2 per cent to close around 6,932, while the Dow Jones Industrial Average powered through the symbolic 50,000 mark for the first time, finishing 2.5 per cent higher at 50,116.
The recovery came after a brutal selloff triggered by concerns over artificial intelligence spending. Anthropic’s new automation tool had sparked fears across software, financial services and asset management sectors, sending shockwaves through the broader market. But bargain hunters emerged in force, snapping up beaten-down technology stocks and driving the Nasdaq 100 up 2.15 per cent.
Chipmakers led the charge, with the semiconductor index soaring 5.7 per cent. Nvidia provided a crucial vote of confidence when chief executive Jensen Huang told CNBC that demand for AI remains incredibly high. The software sector also rebounded sharply, adding 3.5 per cent after being at the centre of the week’s turbulence.
Amazon bucked the trend, sliding 5.6 per cent after revealing plans to spend $200 billion on AI technology. The eye-watering capital expenditure figure underscored the massive bets hyperscalers are making on artificial intelligence infrastructure, even as investors question whether returns will justify the investment.
Beneath the headline indices, market breadth was notably strong. More than 400 stocks in the S&P 500 advanced, with the equal-weighted version of the index hitting an all-time high. The Russell 2000 jumped 3.6 per cent, suggesting the rally extended well beyond mega-cap technology names.
Bitcoin staged a remarkable recovery, surging 11 per cent to around $70,000 after tumbling 50 per cent from its October peak during Thursday’s cryptocurrency meltdown. The dramatic swing highlighted the volatile nature of digital assets, with the token reclaiming almost all losses from the previous session.
Treasury yields edged higher, with the 10-year note rising three basis points to 4.21 per cent. Consumer sentiment data provided some encouragement, improving to the highest level in six months despite recent concerns about the jobs market.
Europe
European stocks finished Friday’s volatile session 0.9 per cent higher, though sector performance diverged sharply as investors digested a mixture of corporate news and ongoing AI concerns.
The automotive sector suffered its worst day in months, tumbling 3 per cent after Stellantis plummeted 24.2 per cent following a business reset that resulted in charges totalling €22 billion. The massive writedown, primarily related to unwinding electric vehicle bets, sent shockwaves through the industry. Renault fell 3.3 per cent after reports emerged that it temporarily cannot sell some models in Germany.
Construction stocks provided a bright spot, surging 3.5 per cent with Vinci leading the way. The French infrastructure giant jumped 9.9 per cent to a record close after delivering results that impressed on both free cashflow and guidance. Holcim added 3.3 per cent on the back of solid quarterly numbers.
Technology stocks managed to rise 1.2 per cent despite renewed pressure on software and IT services companies following Anthropic’s AI announcement. ASML climbed 3.8 per cent, while Infineon and ASM International both posted solid gains.
Banks outperformed, adding 1.4 per cent to reach their best level since 2008. HSBC rose 2.2 per cent, while Barclays gained 2.7 per cent. The sector received a boost as the US earnings season kicked off with major Wall Street firms reporting.
Pharmaceutical stocks rebounded after a difficult week. Novo Nordisk surged 5.3 per cent following concerns about a copycat version of its Wegovy obesity treatment that had hammered the stock earlier in the week.
Energy companies added 1.5 per cent as oil prices held steady despite an apparent easing in geopolitical tensions. Iran said it had agreed with the United States to continue indirect talks aimed at de-escalating tensions.
Australia
Australian shares are poised for a strong start to Monday’s session, with S&P/ASX 200 futures pointing to a gain of 102 points, or 1.2 per cent, to 8,749. The local market will take its cue from Wall Street’s impressive recovery, particularly the technology sector bounce that drove US indices sharply higher.
CAR Group delivered first-half results that beat expectations, with adjusted net income of $196.8 million coming in 16 per cent ahead of the previous period. Revenue of $626 million topped consensus forecasts of $619.4 million, though earnings before interest, tax, depreciation and amortisation narrowly missed expectations. The company reaffirmed guidance for 12 to 14 per cent revenue growth in constant currency terms for the full year.
The major miners will be in focus after mixed overnight moves. BHP’s American depositary receipts gained 0.8 per cent, while Rio Tinto’s ADRs climbed 2.5 per cent. However, iron ore prices slipped below the $100 per tonne mark as concerns about Chinese demand persisted. Adding to local supply concerns, all major Australian iron ore ports have been shut as a cyclone approaches the region.
Government bond yields eased, with the three-year falling 3.9 basis points to 4.30 per cent and the 10-year declining 3.1 basis points to 4.83 per cent. The moves came despite yields rising in the United States, suggesting local investors are positioning for a different rate trajectory from the Reserve Bank.
A busy week of earnings lies ahead, with major reports due from Commonwealth Bank, CSL, James Hardie, Macquarie Group, Computershare and AGL Energy. The reporting season has become increasingly volatile, with the August period marking the most turbulent on record.
Commodities and currencies
Gold continued its remarkable run, surging 3.9 per cent to $4,964.36 an ounce as investors sought safe-haven assets amid market turbulence. The precious metal has been one of the standout performers in recent sessions, benefiting from uncertainty around technology valuations and geopolitical concerns.
Oil prices edged marginally higher despite an apparent easing in tensions between the United States and Iran. Brent crude rose 0.7 per cent to $68.05 a barrel. Tehran described initial indirect talks with Washington as positive, with both sides agreeing to continue negotiations aimed at de-escalating tensions and averting military confrontation.
Copper trimmed its weekly losses but still closed lower on signs of softer demand in China. Exchange stockpiles in London, New York and Shanghai all posted sharp weekly increases, reinforcing concerns about near-term consumption in the world’s largest metals consumer.
The Australian dollar surged 1.3 per cent to 70.15 US cents as the greenback weakened broadly. The move came despite ongoing concerns about Chinese economic growth and the implications for Australian commodity exports. The euro gained 0.4 per cent to $1.1823, while the British pound advanced 0.7 per cent to $1.3619.
Bitcoin’s dramatic recovery saw the cryptocurrency jump 11 per cent to around $70,000, reclaiming almost all the losses from Thursday’s meltdown. The volatile session highlighted the speculative nature of digital assets, with traders rushing back in to buy the dip after the previous day’s sharp selloff.
Economic Calendar
No Major Economic announcements
This article was written by Calvin Curdie, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
