The ASX will fall today after the Nasdaq logged its worst day in a month. ASX 200 futures are down 69pts (-0.84%) as of 8:30 am AEDT.
The ASX gained 0.3% on Thursday, while the Australian dollar fell 1.1% to 62.37 US cents.
Nvidia, a key driver of Wall Street’s recent gains, weighed heavily on the market. Despite an initial rise following a stronger-than-expected profit report, the stock reversed course, closing 8.5% lower.
Salesforce also faced investor disappointment, dropping 4% despite surpassing analysts’ profit expectations for the latest quarter. While analysts described its performance as solid and the company highlighted its artificial intelligence (AI) initiatives, its revenue forecast fell short of market expectations.
AI weighs on US stocks
US sharemarkets declined on Thursday, weighed down by a sharp drop in artificial intelligence (AI) heavyweight Nvidia following its quarterly report, while investors assessed data indicating a cooling US economy.
Market sentiment was further dampened by former US President Donald Trump's announcement that 25% tariffs on Canada and Mexico would take effect on March 4, alongside an additional 10% tax on Chinese imports from the same date.
Nvidia shares fell 8.5% after the chipmaker issued an upbeat revenue forecast but provided a first-quarter gross margin outlook that fell short of expectations. Super Micro Computer slumped 16%, while the Philadelphia Semiconductor Index declined 6.1%.
Among other notable moves, Salesforce shares dropped 4% after the company projected fiscal 2026 revenue below estimates. Viatris fell 15.2% as the drugmaker forecast weaker-than-expected annual results. Meanwhile, Warner Bros Discovery gained 4.8% after stating that it expects streaming profits to double this year.
The Dow Jones Industrial Average fell 194 points, or 0.5%, the S&P 500 declined 1.6%, and the Nasdaq Composite shed 531 points, or 2.8%.
European sharemarkets pull back
European sharemarkets pulled back from record highs on Thursday, led by declines in the automotive sector as investors assessed the potential impact of US President Donald Trump's proposed tariffs on the European Union. An index tracking automakers and component manufacturers fell 3.7%, with Stellantis dropping 5.2%, BMW losing 3.8%, and Porsche declining 3.3%. The continent-wide FTSEurofirst 300 index slipped 0.4%.
In contrast, London's FTSE 100 index gained 0.3%, supported by a 15.9% surge in Rolls-Royce shares, which hit a record high after the British engine-maker raised its mid-term targets and exceeded 2024 profit growth expectations.
Currencies and commodities
Currencies
In currency markets, major currencies weakened against the US dollar.
- The euro fell from US$1.0486 to session lows near US$1.0400 by the US close.
- The Australian dollar declined from US$0.6303 to session lows of approximately US$0.6235.
- The Japanese yen eased from JPY149.15 per US dollar to JPY150.15 before stabilising near JPY149.70 at the US close.
Oil prices rose 2% on renewed supply concerns after Trump revoked a licence allowing Chevron to operate in Venezuela. Brent crude climbed US$1.51, or 2.1%, to US$74.04 per barrel, while US Nymex crude added US$1.73, or 2.5%, to US$70.35 per barrel.
Base metal prices were mixed, with copper futures rising 0.9%, while aluminium dipped 0.3%. Gold futures fell US$34.70, or 1.2%, to US$2,895.90 per ounce as a stronger US dollar weighed on prices, with investors awaiting a key US inflation report. Spot gold traded near US$2,875 at the US close.
Iron ore futures edged down US$0.08, or 0.1%, to US$107.07 per tonne, pressured by escalating tariff measures against Chinese steel, though robust demand from China provided some support.
What about small caps?
The S&P/ASX Small Ordinaries (XSO) gained 0.75% yesterday to 3,176.50, but remains 1.51% to the red for the week.
It’s a slow morning for news, but you can read about the following and more throughout the day.
- Alkane Resources Ltd has released the latest results for underground expansion drilling around the existing resources at the company’sTomingley Gold Operations in Central New South Wales. At the Caloma Two deposit, underground resource expansion drilling of 91 holes for 15,439 metres tested mineralised structures separate from the defined resources.
- Cobalt Blue Holdings Ltd has secured $700,000 by way of an advance on its forecast Research and Development Tax Incentive (R&DTI) refund for the 2025 financial year (FY25). The advance will provide additional capital to assist with finalisation of the production flowsheet for the Kwinana Refinery Project.
- Lindian Resources has released an update on the continued advancement of its flagship Kangankunde Rare Earths Project in Malawi, alongside key senior management changes as the company transitions into project delivery. As part of Lindian’s transition towards project delivery, Mr Alwyn Vorster and the Board have mutually agreed to conclude his fixed-term contract early, with Mr Vorster stepping down as CEO effective February 28, 2025.