United States
Wall Street paused its recent rally overnight as renewed concerns over the cost and sustainability of artificial-intelligence spending rattled sentiment. Meta Platforms tumbled 11 per cent after unveiling larger-than-expected investment plans, dragging down the broader technology sector and prompting traders to take profits following months of heavy gains. The S&P 500 slipped 1 per cent, the Nasdaq 100 dropped 1.5 per cent, and the Dow Jones Industrial Average edged 0.2 per cent lower.
While the broader US–China trade truce offered a modest tailwind, investors viewed the agreement as largely priced in. The pullback came after a remarkable USD 17 trillion rebound from April’s lows, with many on Wall Street suggesting valuations had grown stretched as market breadth narrowed.
Apple gained more than 4 per cent after posting record quarterly sales, while Amazon jumped 10 per cent in after-hours trading on the back of strong cloud revenue growth. Atlassian surged 12 per cent after reporting a 26 per cent rise in cloud revenue. Conversely, Microsoft and Nvidia weakened after cautious comments around future chip sales to China.
Bond yields rose modestly, with the US 10-year Treasury yield climbing one basis point to 4.09 per cent, while the US dollar strengthened to a three-month high. The Federal Reserve’s latest policy decision signalled a more cautious stance on future rate cuts, dampening market enthusiasm. Chair Jerome Powell’s warning that investors may be too optimistic about December’s rate-cut prospects reinforced expectations that policy easing will be slower than previously anticipated.
Corporate news was heavy. Mastercard, Bristol Myers Squibb and Kimberly-Clark beat expectations, while Merck, Biogen and Gilead disappointed. Nvidia confirmed plans to invest USD 1 billion in AI start-up Poolside, and Palantir filed a lawsuit against two former engineers for allegedly stealing company IP. Coinbase and Reddit both reported stronger-than-expected quarterly sales, while Hershey cited soft Halloween demand despite raising its outlook.
Bitcoin slumped 4.4 per cent to USD 106,600 and Ether fell 6.4 per cent to USD 3,698, extending the week’s weakness in digital assets.
Europe
European equities finished slightly lower after a mixed session dominated by corporate earnings and the European Central Bank’s decision to leave rates unchanged for a third straight meeting. The Stoxx Europe 600 slipped 0.1 per cent after paring deeper early losses.
Technology shares outperformed following the ECB announcement, while autos and media stocks lagged. Schneider Electric dropped 3.3 per cent after results fell short of heightened expectations, and WPP plunged to its lowest level since 1998 after cutting its full-year growth outlook. Remy Cointreau tumbled 6.7 per cent on a profit warning. In contrast, ING Groep jumped 5.7 per cent on stronger-than-expected earnings, Standard Chartered gained after raising its income targets, and Airbus advanced to a record high after reaffirming its delivery goals.
The ECB kept its benchmark rate steady, citing controlled inflation and steady economic activity. French GDP grew 0.5 per cent in the September quarter — its fastest pace since 2023 — easing fears of stagnation. European earnings overall have proven resilient, with third-quarter earnings per share up around 5 per cent for companies reporting so far, comfortably ahead of forecasts for a small decline.
Australia
Australian shares are set to open modestly higher despite a weak Wall Street lead. Futures suggest the S&P/ASX 200 will start 13 points (0.2 per cent) higher, as investors digest a strong round of US earnings alongside hawkish commentary from the Fed.
Locally, the market extended losses on Thursday, declining 0.4 per cent to 8,885.5 points, following Wednesday’s sharp 1 per cent fall triggered by hotter-than-expected domestic inflation. Property and consumer discretionary sectors led the decline as traders recalibrated expectations for further Reserve Bank rate moves.
Rate-sensitive property names slumped, with Mirvac down 3.8 per cent, Dexus off 4.3 per cent, and Stockland 3.4 per cent lower. Consumer giants Wesfarmers and JB Hi-Fi fell 7.1 per cent and 4.5 per cent respectively, while tech stocks Xero, WiseTech and Block also weakened.
Lithium names bucked the trend as JPMorgan upgraded price forecasts, sending Pilbara Minerals up 5.4 per cent, Mineral Resources 13.7 per cent higher, and Liontown 11.2 per cent firmer.
ResMed was a bright spot after reporting a 9 per cent rise in quarterly revenue to USD 1.3 billion and a 12 per cent lift in net income to USD 348.5 million. The company also announced plans to expand US manufacturing capacity.
Apple’s record results, strong performances from Amazon and Atlassian, and robust lithium sentiment are expected to lend early support to the local market. However, with global bond yields firming and the Fed signalling caution, gains may remain constrained.
Key corporate updates today include quarterly results from Origin Energy and a slew of annual meetings across names such as Fortescue, Steadfast, Pinnacle Investment and CAR Group. Domestic data releases feature September private-sector credit at 11.30 a.m., while China’s manufacturing PMI later in the day will also be closely watched for signs of stabilisation in the region’s demand outlook.
At 4.20 p.m. in New York, the Australian dollar was down 0.3 per cent to US 65.53 cents. The US 10-year yield was 4.09 per cent versus Australia’s 4.30 per cent.
Commodities and currencies
Commodity markets were mixed. West Texas Intermediate crude fell 0.4 per cent to USD 60.25 a barrel, while Brent slipped to USD 64.66. Gold jumped 2.4 per cent to USD 4,025 an ounce as investors sought refuge amid the tech-driven equity sell-off. Iron ore eased 0.7 per cent to USD 106.45 a tonne.
In currency markets, the Bloomberg Dollar Spot Index rose 0.4 per cent. The euro slipped 0.3 per cent to USD 1.1565, the pound weakened 0.4 per cent to USD 1.3147, and the yen fell 0.9 per cent to JPY 154.06 per dollar.
The stronger greenback and resilient US yields underscored diverging central-bank trajectories as traders reassessed global monetary policy paths. Cryptocurrencies remained under pressure, with risk appetite subdued following Powell’s comments and broader weakness in equities.
Economic Calendar
US:
- PCE Inflation (Sep) 23:30
AU:
- Producer Prices (Q3) 11:30
This article was written by James Woods, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
