Tech Slump, Oil Ease Drive Mixed Global Markets as ASX Banks Lead Rally

The S&P/ASX 200 rose 38.7 points, or 0.5 per cent, to 8699.6 in early trade on Friday, with six of 11 industry sectors in positive territory. Financial stocks advanced across the board: Westpac rose 1 per cent while Commonwealth Bank, National Australia Bank and ANZ Bank each added 0.9 per cent.

Technology stocks on the ASX bucked their Wall Street counterparts, with Codan up 0.9 per cent, WiseTech gaining 1.6 per cent, Xero advancing 2.2 per cent, Technology One climbing 1.2 per cent and NEXTDC rising 0.8 per cent.

Mining stocks were mixed. BHP lost 0.3 per cent, Fortescue shed 0.6 per cent, and Rio Tinto was 0.3 per cent higher. Gold miners rallied after the precious metal rose from a two-month low, climbing as much as 0.9 per cent to trade near $US4,146 an ounce. Northern Star added 0.5 per cent and Evolution Mining was 0.7 per cent higher.

Overnight on Wall Street, the S&P 500 dipped 0.5 per cent for its second straight loss after setting its all-time high. The Dow Jones closed flat, while the Nasdaq finished 1.3 per cent lower.

**OpenAI Report Hits Tech Sentiment**

Tech and AI-linked stocks slumped around midday amid multiple bearish headlines. Nvidia, the chipmaker at the center of the artificial-intelligence boom, fell 2.9 per cent and was one of the heaviest weights on the S&P 500. The Financial Times reported that OpenAI’s annualised revenue is $US20 billion ($28.7 billion) less than previously signalled.

Oracle slid following a report it was trucking natural gas to server farms as a workaround to power bottlenecks. Even Taiwan Semiconductor Manufacturing Co., which reported September growth suggesting revenue for the latest quarter topped analysts’ expectations, saw its US-listed stock fall 1.4 per cent.

**Bond Yields Swing, Pressure Stocks**

The bond market added to the pressure. The yield on the 10-year Treasury veered from 5.28 per cent late Wednesday to 5.35 per cent early Thursday before settling back to 5.26 per cent. Despite the back-and-forth, the yield remains near its highest level since 2002 and well above the 3.97 per cent level seen before the war with Iran began, reflecting worries about high inflation, large government debt loads and other factors.

A fresh report showing fewer US workers applied for unemployment benefits last week helped support yields. Higher yields can slow the economy by making borrowing more expensive, and they put downward pressure on stock prices, especially those seen as the most expensive. That raises the bar for companies to deliver big profit growth to offset the drag from higher bond yields.

The S&P 500’s rally to a record is partly driven by analyst expectations that companies in the index will deliver nearly 30 per cent earnings per share growth in the upcoming reporting season.

**Oil Eases, Gold Rises on Iran Comments**

Energy stocks on the ASX were mixed after oil prices eased in early Asian trade. President Donald Trump said the US would not attack Iran before the midterm elections, prompting traders to reassess the energy price outlook. West Texas Intermediate dropped toward $US91 a barrel, while Brent crude closed above $US104. Woodside Energy dipped 0.3 per cent, Santos added 0.2 per cent, Ampol was flat and Viva Energy shed 0.9 per cent.

The Australian dollar traded at US69.59¢.

**Earnings Season Shows Mixed Picture**

Levi Strauss reported a bigger profit for its latest quarter than analysts expected and raised its full-year profit forecast, but its stock fell 2.4 per cent after revenue growth missed expectations. PepsiCo added 3.7 per cent after reporting stronger profit and revenue for the quarter than analysts expected, highlighting strength outside of North America, though it cut its forecast for an underlying measure of profit this fiscal year.

**Global Markets Slide**

In Asia, South Korea’s Kospi fell 2.6 per cent, one of the larger losses globally, hurt by a 2.4 per cent drop in Samsung Electronics. The tech giant said operating profit for the latest quarter likely soared to $US107.4 trillion Korean won ($110 billion) from $US12.17 trillion won a year earlier, but the result failed to satisfy investors. Indexes fell across much of the rest of Asia and Europe.

**ASX Listing Pulled**

Separately, data centre start-up Firmus withdrew its plans for a blockbuster listing on the ASX after investors balked at the price and terms, scrapping an initial public offering that would have valued the Australian company at about $43.7 billion.