United States
Wall Street’s tech-led recovery gathered further momentum overnight as investors shook off last week’s artificial intelligence jitters and piled back into beaten-down names.
The S&P 500 climbed 0.5 per cent to 6,977, edging closer to record territory after adding roughly $1 trillion in value during Friday’s session alone. The Dow Jones Industrial Average held above the 50,000 mark, finishing little changed at 50,172, while the tech-heavy Nasdaq 100 rose 0.8 per cent.
Technology stocks that bore the brunt of last week’s bruising sell-off continued their bounce. A gauge of chipmakers advanced 1.4 per cent, while an ETF tracking software names extended its back-to-back rally to almost 7 per cent. Nvidia added 2.5 per cent after surging nearly 8 per cent on Friday, and Oracle jumped 9.6 per cent.
The rebound came as investors appeared to recalibrate their concerns about AI disruption. Google parent Alphabet’s planned sale of up to $20 billion in US dollar bonds attracted more than $100 billion in orders, signalling robust appetite for exposure to the AI buildout. The company is also pitching investors on what would be its first offerings in Switzerland and the UK, the latter including a rare sale of 100-year bonds.
Morgan Stanley’s equity team noted that fundamental tailwinds remain in place for AI enablers, while the rout in software stocks has created attractive entry points in names including Microsoft, Salesforce and ServiceNow. The technology sector reset was a necessary digestion of prior gains, with the industry projected to deliver earnings-per-share growth of 32 per cent in 2026.
Still, not everyone is convinced the coast is clear. Hedge funds piled into short positions on US stocks last week, with notional short selling across single stocks reaching the highest on record in Goldman Sachs data going back to 2016. RBC Capital Markets maintained its 12-month S&P 500 price target of 7,750, while UBS Global Wealth Management is targeting 7,700 by December.
Traders are now gearing up for a busy week of economic data. Wednesday’s jobs report is expected to show payrolls rose 69,000 in January, with unemployment steady at 4.4 per cent. Friday’s consumer price index will provide further insight into the inflation trajectory and help shape the Federal Reserve’s thinking on rates.
Europe
European equities advanced, with the Stoxx 600 climbing 0.7 per cent as miners led the pack on the back of gold’s recovery above $5,000 an ounce.
Basic resources was the standout sector, surging 2.9 per cent as precious metals found their footing. Rio Tinto gained 3 per cent after an upgrade, while Glencore added 4.8 per cent and Anglo American rose 3.2 per cent.
Industrials impressed with a 1.7 per cent gain, driven by strength in defence names. Rolls-Royce jumped 3.7 per cent, while Siemens and ABB both advanced 2.2 per cent, with ABB closing at a record level.
Banks climbed 1.3 per cent, led by UniCredit’s 6.4 per cent surge after the Italian lender unveiled new financial targets and plans to return 50 billion euros to investors over five years. HSBC touched a record close, though UK lenders lagged amid uncertainty over Prime Minister Keir Starmer’s leadership. NatWest tumbled 6 per cent after agreeing to acquire wealth manager Evelyn Partners for 2.7 billion pounds.
In healthcare, Novo Nordisk bounced 5.2 per cent after Hims & Hers dropped plans to sell a copycat version of its Wegovy pill, though the US Food and Drug Administration separately said a television advertisement for the Danish company’s weight-loss pill contained misleading claims.
Technology added 0.9 per cent, with STMicroelectronics soaring 9.5 per cent after deepening ties with Amazon Web Services on data centres. Telecoms reached an eight-year high, while construction closed at an all-time high.
Australia
Australian shares are poised for a positive start to Tuesday’s session, with S&P/ASX 200 futures pointing up 0.4 per cent to 8,857.
The major miners will be in focus after strong overnight gains in their American depositary receipts. BHP’s ADRs climbed 2.9 per cent, while Rio Tinto’s ADRs jumped 3.6 per cent amid the broader resources rally.
BHP was busy on the news front, with major Australian iron ore ports reopening as cyclone risk receded, while reports emerged the company is planning a spending boost at its Vicuña copper project. Meanwhile, Orion Minerals signed a $250 million prepayment facility with Glencore, and Pilbara Minerals said it would resume operations at several ports following the cyclone.
On the earnings front, automotive parts supplier Amotiv reported 3.3 per cent revenue growth to $520.5 million for the half year, with statutory net profit jumping 39.4 per cent to $46 million. The company lifted its interim dividend 8.1 per cent to 20 cents fully franked. Region Group is also due to report.
Broker activity included JPMorgan upgrading Bravura Solutions and Moelis lifting Fineos Corp to buy.
Key domestic data includes Westpac’s February consumer confidence report at 10.30am and NAB’s January business confidence at 11.30am. Bond yields ticked higher, with the three-year rising 3.4 basis points to 4.33 per cent and the ten-year adding 4 basis points to 4.87 per cent.
Commodities and currencies
Gold climbed back above the $5,000 threshold as dip-buyers returned to the market following last month’s historic rout. Spot gold rose 2.4 per cent to $5,083 an ounce, recovering around half of its losses since plunging from all-time highs on January 29. Data over the weekend showed China’s central bank extended gold purchases for a fifteenth consecutive month.
Oil prices edged higher after the United States advised ships to steer clear of Iranian waters when navigating the Strait of Hormuz. Brent crude gained 1.3 per cent to $68.93 a barrel, while West Texas Intermediate added 1.2 per cent to $64.30. Iron ore firmed 0.8 per cent to $99.80 a tonne.
The Australian dollar strengthened 1.1 per cent to 70.93 US cents as the greenback weakened broadly. The euro rose 0.8 per cent to $1.1914.
Bitcoin wavered near $70,000, with derivatives markets flashing warning signs despite the cryptocurrency’s bounce from near $60,000. Funding rates on bitcoin perpetuals remain negative, while open interest has failed to recover from a decline that began in October.
Economic Calendar
AU:
- Westpac Consumer Conf SA MoM 10:30
This article was written by Calvin Curdie, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
