Stan Choe
Updated ,first published
The US stock market sank in mixed trading, while gold and silver bounced higher after their latest sell-off.
The S&P 500 fell 0.8 per cent and pulled further from its all-time high set last week. The Dow Jones Industrial Average dipped 166 points, or 0.3 per cent, and the Nasdaq composite sank 1.4 per cent.
The Australian sharemarket is set to decline, with futures at pointing to a fall of 20 points, or 0.2 per cent, at the open. The ASX added 0.9 per cent on Tuesday, while the RBA raised rates for the first time in more than two years. The Australian dollar was stronger at US70.12¢ at5.17am AEDT.
Several influential Big Tech stocks weighed on the market, including drops of 2.8 per cent for Nvidia and 2.9 per cent for Microsoft. Such giants have been hampered by worries that their stock prices shot too high and became too expensive following their years-long dominance of the market.
Stocks of software companies and others seen as potential losers to competitors powered by artificial intelligence also slumped. ServiceNow fell 7 per cent to bring its loss for the young year so far to 28.3 per cent.
Such declines dragged the S&P 500 to its fourth loss in the last five days, even though the majority of stocks in the index rose. That included a 6.8 per cent climb for Palantir Technologies, which reported a bigger profit for the latest quarter than analysts expected. Its forecast for 61 per cent growth in revenue this year also topped analysts’ expectations.
Some of the day’s strongest action remained in the metals markets. Gold’s price climbed 6.1 per cent to settle at $US4935.00 per ounce in the latest swing since its jaw-dropping rally suddenly halted last week. Silver’s price, which has been whipping through even wilder moves, rallied 8.2 per cent.
Gold and silver prices had been climbing for more than a year as investors looked for safer places to park their cash amid worries about everything from tariffs to a weaker US dollar to heavy debt loads for governments worldwide. Their prices took off in particular last month, and gold’s price at one point had roughly doubled over 12 months.
But those rallies suddenly gave out last week, and gold’s price dropped from close to $US5600 to less than $US4500 on Monday. Silver plunged 31.4 per cent on Friday alone.
Many traders say that what turned the momentum was expectations that President Donald Trump’s nominee to lead the Federal Reserve will keep interest rates high to fight inflation, though some disagree. Most agree that simple gravity took over afterward.
After gold and silver prices had shot up so much, so quickly, they were bound to fall back at some point, particularly with so many investors piling in to gold as a way to bet on continued weakness for the US dollar.
“The move underscored how stretched anti-USD positioning had become,” according to strategists at Barclays.
On Wall Street, PayPal dropped 20.3 per cent after reporting weaker results for the latest quarter than analysts expected. It also named a new CEO after it said “the pace of change and execution” over the last two years “was not in line” with the board of directors’ expectations.
Pfizer fell 3.3 per cent even though it reported stronger profit for the latest quarter than analysts expected. The pharmaceutical company gave a forecasted range for profit in 2026 whose midpoint was below analysts’ expectations.
Shares of Banco Santander, the Spanish bank, that trade in the United States fell 6.4 per cent after it said it will buy Webster Financial in a cash-and-stock deal valued at roughly $12.3 billion. The parent company of Webster Bank rallied 9 per cent.
On the winning side of the market was PepsiCo, which rose 4.9 per cent after the snack and beverage giant’s profit and revenue for the latest quarter nudged past analysts’ expectations. It also said it would cut prices this year on Lay’s, Doritos and other snacks to try and win back inflation-weary customers.
The Walt Disney Co. slipped 0.2 per cent after it said Josh D’Amaro, head of the company’s parks business, will become its next CEO in March.
DaVita rallied 21.2 per cent after the provider of dialysis and other health care services likewise delivered a better profit for the latest quarter than analysts expected.
All told, the S&P 500 fell 58.63 points to 6,917.81. The Dow Jones dipped 166.67 to 49,240.99, and the Nasdaq composite sank 336.92 to 23,255.19.
In the bond market, the yield on the 10-year Treasury eased to 4.26 per cent from 4.29 per cent late Monday.
In stock markets abroad, indexes bounced back in Asia from sharp losses the prior day.
South Korea’s Kospi surged 6.8 per cent for its best performance since the wild days of the COVID crash and recovery in early 2020. Just a day earlier, it had tumbled 5.3 per cent from its record for its worst day in almost 10 months. The Kospi is home to many tech stocks, including Samsung Electronics, which surged 11.4 per cent.
Japan’s Nikkei 225 rallied 3.9 per cent, while stocks rose 1.3 per cent in Shanghai and 0.2 per cent in Hong Kong.
Indexes nudged lower in Europe, with France’s CAC 40 edging down by less than 0.1 per cent.
AP
The Market Recap newsletter is a wrap of the day’s trading. Get it each weekday afternoon.
