The mining sector, which was trading in the red during the day, finished flat (up 0.1 per cent) amid a slump in lithium and gold miners, led by Newmont.
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The world’s largest gold producer plunged 8.1 per cent after announcing it was seeking to sell six mines and two projects as part of an effort to generate $3.1 billion in cash.
The Telfer and Havieron mines in Western Australia are among the assets to be sold.
Newmont was the worst performing large-cap stock, followed by Mercury NZ, Qube Holdings (down 3 per cent) and Evolution Mining (down 2.7 per cent).
The lowdown
National Australia Bank has tipped monthly inflation to rise to 3.5 per cent for the 12 months to January, up from the 3.4 per cent recorded in the year to December.
The bank’s Australian Wellbeing Index survey also found financial stress had increased to its highest level since mid-2016. A third of Australians believe they are worse off financially compared with a year ago, and the unemployed, renters and low-income earners are among those with the lowest wellbeing.
Commonwealth Bank, meanwhile, said its analysis of CoreLogic housing data pointed to another month of gains in February. “Looking at the data for the month to date, it suggests that home prices have re-accelerated in Sydney after a softer couple of months,” CBA said.
“Melbourne remains slower than the national rate while most of the growth continues to occur in Brisbane, Adelaide and Perth.”
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AMP chief economist Shane Oliver said global shares had surged in the past week to new record highs in the United States, Europe and Japan on the back of enthusiasm for AI after a “very strong result” from AI chip maker Nvidia.
He said the tech giant’s results offset ongoing indications from central banks they would not be rushing to cut interest rates.
“The minutes from the last [US Federal Reserve] meeting reiterated that it’s seeing progress in reducing inflation but wants more evidence that it will be sustained and is wary about moving too quickly to cut rates with stronger economic activity data lately providing them with flexibility. Speeches by Fed officials tended to back this up,” Oliver said in a note.
“The minutes from the last RBA board meeting repeated that the RBA now sees the risks to the outlook as being more balanced and it’s more confident that inflation will fall back to target, but so far it’s not sufficiently confident and as at the last meeting was still only considering hiking again or holding but not yet considering a rate cut.”
The S&P 500 rose 2.1 per cent to another all-time high. The Nasdaq added 3 per cent. The Dow, which has a smaller weighting in tech stocks, rose 1.2 per cent, marking its first close above 39,000.
Nvidia surged 16.4 per cent, adding about $US277 billion ($422 billion) in market capitalisation and bringing its total market value near $US2 trillion. It came after the firm reported that its revenue and profit soared in the latest quarter thanks to booming demand for its chips used for artificial intelligence. The stock has tripled over the past year thanks to rising investor enthusiasm over artificial intelligence.
The company’s surge to an all-time high is the biggest single-session increase in market value in history, besting Meta’s historic $US197 billion gain just three weeks ago. Synopsis, which makes software used to test and develop chips, rose 6.9 per cent after raising its profit forecast.
Other chipmakers and companies involved in the chipmaking industry gained ground. Advanced Micro Devices rose 10.7 per cent and Lam Research rose 4.7 per cent.
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Bond yields were relatively steady. The yield on the 10-year Treasury rose to 4.33 per cent from 4.32 per cent late Wednesday.
On the losing end, electric truck and SUV maker Rivian tumbled 25.6 per cent after it reported another loss and issued a weaker-than-expected production outlook. Lucid, another electric vehicle manufacturer, slid 16.8 per cent after it missed Wall Street sales forecast and also gave a weaker production estimate than analysts had called for.
Online craft marketplace Etsy slipped 7.2 per cent after it missed Wall Street’s profit forecast by a wide margin. Technology stocks have been the driving force behind the US market’s rally that started in October. Solid earnings from some of the biggest names in the sector are helping justify and reinforce those big gains.
“Investors are still wondering, will the market top out or broaden out,” said Sam Stovall, chief investment strategist at CFRA Research in New York. “As of now, investors are basically saying I’m going to let this market take me where it wants to go, and right now that’s higher.”
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The chief investment officer for the Americas at UBS Global Wealth Management, Solita Marcelli, said: “The near-term momentum in AI-related stocks is likely to continue.”
Wall Street’s focus on earnings this week follows economic data from the previous week that prompted a stumble in the market. Inflation data came in hotter than Wall Street expected, while retail sales fell more than anticipated. That raised concerns about the timing of hoped-for interest rate cuts from the US Federal Reserve.
Wall Street is now betting that the central bank will start trimming its benchmark rate in June, rather than March.
Investors could get more clarity on inflation next week when the government releases its monthly report on personal consumption and expenditures. It’s the Fed’s preferred measure of inflation as it tries to tame inflation back to 2 per cent. Analysts expect that report to show inflation cooled to 2.3 per cent in January. It peaked at 7.1 per cent in June of 2022.
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“Accelerated computing and generative AI have hit the tipping point,” Nvidia chief executive Jensen Huang said in a statement. “Demand is surging worldwide across companies, industries and nations.”
Huang’s wealth jumped $US9.6 billion ($14.7 billion) to $US69.2 billion, a gain that leapfrogged him ahead of Charles Koch and Chinese bottled-water tycoon Zhong Shanshan to 21st place on the Bloomberg Billionaires Index.
It’s a remarkable rise for the co-founder of the semiconductor company, who was ranked 128th with a net worth of $US13.5 billion as recently as early last year.
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With AP, Bloomberg
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