Outlook for the day: Mildly negative after an attempted Wall Street rebound largely fizzled out. However, the reaction to Nvidia earnings this morning could reset the tone if US stock futures react strongly.
ASX futures: down 10 points or 0.12%
Overnight themes:
US stocks gave up most of their early gains as caution prevailed ahead of a trading update from Nvidia this morning and inflation data tomorrow night.
The S&P 500 narrowly avoided a fifth straight loss with a gain of 0.01% or less than a point. The Nasdaq bounced 0.26% in late trade. The Dow shed 0.43%.
A solid morning rally soured after President Donald Trump added the European Union to his trade war. The president said the EU would face 25% tariffs on all imports. He also reaffirmed that 25% tariffs on Mexico and Canada would go ahead, but not until April. The latest delay is the fourth since Trump announced plans to impose the duties on his nearest neighbours. Confusion and wariness over the timing and scale of Trump's tariff plans have started to show in recent economic data.
“Policy uncertainty... has certainly filtered its way into a lot of the soft data. That’s why you’re seeing thing like buying intentions for big ticket items, capex intentions and spending plans really pull down" - Liz Ann Sonders, chief investment strategist at Charles Schwab (per CNBC).
Investors awaited a potentially explosive trading update from AI darling Nvidia shortly after the closing bell this morning. A strong result would settle US nerves after China's DeepSeek unveiled a low-cost AI model that appeared to match or outperform its expensive US rivals. Shares in the chip company firmed 3.67% in regular trade.
“Nvidia is the bellwether and market-darling stock that is of vital importance to the broader markets. Its performance provides meaningful guidance for the broader market tone. The importance for the tech sector cannot be understated,” SWBC chief investment officer Chris Brigati told CNBC.
Nvidia's rally helped lift the tech sector 0.89%. Utilities, communication services and industrials also finished higher. The night's biggest drags were consumer staples -1.86% and health -0.69%.
Iron ore declined for a third session in China after Vietnam jointed South Korea in imposing duties on Chinese steel imports. Benchmark ore eased 0.98% on the Dalian Commodity Exchange to US$111.86 a metric ton.
Oil fell to a 2025 low as traders weighed the impact of a trade war on global growth, and the potential for a breakthrough in Ukraine peace negotiations to lift sanctions on Russian crude. Brent crude declined 49 US cents or 0.67% to US$72.53 a barrel, a level last seen in December. “Lingering tariff risks and falling consumer confidence are fueling demand concerns. In addition, prospects for a peace deal between Russia and Ukraine are improving as the U.S. and Ukraine agree on a minerals deal,” Warren Patterson and Ewa Manthey, strategists at ING, said in a note quoted on MarketWatch. An agreement “would take us a step closer to Russian sanctions being lifted, removing much of the supply uncertainty hanging over the market.”
Gold prices fluctuated after falling from a record on Monday to a one-week low on Tuesday. Gold futures bounced US$11.80 or 0.4% to settle at US$2,930.60 an ounce. However, spot gold was lately down UUS$2.68 or 0.09% at US$2,915.66. The spot price raised its record to US$2,956.15 on Monday.
Bitcoin continued to slide, extending its decline since its January record high to 22%. The e-token was lately down 4.44% at US$84,177. Prices topped out above US$109 a little more than five weeks ago as buyers anticipated crypto-friendly policies from the White House.
