ASX falls after slow session on Wall Street; Tech stocks, miners lead losses

The Australian sharemarket has opened on a weaker note after a selloff in chipmakers left US stocks wavering ahead of the reporting season, with Wall Street recording its slowest session this year.

The S&P/ASX 200 dropped 19.20 points, or 0.2 per cent, to 8764 as of 10.17am AEDT, with eight of its 11 industry sectors in the red. Miners and tech stocks led the early losses, while energy stocks and defensive sectors advanced. The ASX added 0.8 per cent on Monday.

The Australian dollar was trading at US69.56¢.

Wall Street kicked off a busy week with a mixed finish for its major stock indexes, although the market remained near its all-time high. The trading volume in US equities was the lowest in 2026, however, as traders stayed on the sidelines before the start of the US earnings season.

The S&P 500 slipped 0.1 per cent after fluctuating between small gains and losses. The benchmark index set a record high on Friday and is up 14 per cent so far this year. The Dow Jones Industrial Average rose 0.4 per cent, and the Nasdaq composite fell 0.4 per cent.

Wall Street’s equity bull run completed its fourth anniversary, with the S&P 500 up nearly 120 per cent from the 2022 bottom. Investors are bracing for high-stakes corporate results that will be crucial to sustaining the rally. Profit resilience helps explain why stocks have remained so strong, said Bret Kenwell at eToro.

“Growth has been powerful enough to keep valuations in check and allow investors to look past higher yields, interest rates and inflation,” he added. “Another strong quarter could reinforce the bull narrative intact into year-end, while a disappointment could catalyse a broader pullback.”

Shares in roughly 64 per cent of the companies in the S&P 500 rose, led by communication services stocks. Meta Platforms rose 3.4 per cent, T-Mobile added 2.2 per cent, AT&T gained 1.4 per cent and Verizon Communications rose 2.7 per cent.

Energy stocks had some of the biggest gains as oil prices kept rising. Chevron rose 1.4 per cent.

Despite those gains, a slide in big technology stocks dragged the market into the red.

Micron Technology fell 3.9 per cent, Advanced Micro Devices dropped 2.3 per cent, Broadcom slid 1.9 per cent and Nvidia gave up 1.3 per cent. They are among several companies in the sector with big stock values that tend to have a heavy influence on the market. They have also been the driving force behind the broader market’s record gains throughout the year.

Those companies could face more scrutiny from investors during this round of corporate earnings as Wall Street tries to get a better sense of whether the stock gains made during the frenzy over artificial intelligence can translate into future growth.

“AI continues to support growth, reinforcing the outlook for tech and critical suppliers across the supply chain,” wrote Magdalena Ocampo, market strategist at Principal Asset Management, in a report. “Yet uncertainty about AI’s long-term impact persists, making future gains more reliant on earnings delivery rather than potential.”

Meta bucked the trend after it released a long-awaited artificial intelligence model, a milestone that will test whether its multibillion-dollar push to rebuild its AI organisation has improved its technology enough to compete among leaders.

Known as Muse Wonder, the new model is the company’s most capable since Meta chief executive officer Mark Zuckerberg overhauled his AI operation through an aggressive hiring push that put new talent at the helm. The company claims the model, dubbed “Watermelon” internally, is a big leap over its own predecessors, with “frontier capabilities” that its leadership say put it on par with OpenAI’s ChatGPT and Anthropic PBC’s Claude when it comes to coding, or working through financial or legal questions. Meta shares closed 3.3 per cent higher.

Stocks are reaching for records often because of the tech sector, but remain very volatile on a daily basis, partly because of big shifts in oil prices and their impact on bond yields and inflation.

The price of Brent crude, the international standard, rose 1.8 per cent to settle at $US106.65 per barrel. Prices have been swinging between $US96 and nearly $US110 over the last month over uncertainty about the US war with Iran and its continued impact on global energy supplies and inflation.

Prices jumped despite President Donald Trump’s announcement on social media that he struck a deal to buy Russian diesel with Russian President Vladimir Putin, aiming to tamp down a spike in fuel prices ahead of the November 3 US midterm elections. The plan, though, runs counter to US efforts to cut the flow of money Russia gets from oil and gas sales that can be used to pay for its war against Ukraine.

Higher oil prices have been driving gasoline prices higher. That’s a direct hit to many people’s wallets, as gasoline is usually a necessary expense. The rise in diesel is more indirect, raising the costs for just about any shipped product, which usually results in higher prices for everything from food to clothing.

The surge in energy prices and its impact on the broader economy will be a key focus this week as Wall Street reviews several important economic updates. They include fresh data on the housing market, inflation and retail sales.

The big updates this week involve reports about inflation hitting consumers and businesses. On Wednesday, the government will release the closely-watched consumer price index, or CPI, which measures price changes for a wide range of products and services. Economists expect the index to show the rate of inflation worsened to 3.6 per cent in September from 3.4 per cent in August.

A report on inflation called the producer price index will be released on Thursday and is also expected to show that inflation remains stubbornly high. It measures inflation faced by businesses before it hits consumers.

An update on how consumers are reacting to high prices will be released on Thursday. Economists expect the report on retail sales for September to show that households pulled back on spending.

The rate of inflation by any measure remains well above the Federal Reserve’s target rate of 2 per cent. That prompted the central bank to raise its benchmark interest rate at its last meeting in an effort to cool inflation. Wall Street expects another rate hike before the year ends.

Inflation and expectations for high interest rates have been driving Treasury yields higher in the bond market. The 10-year Treasury yield, which influences mortgage rates, recently touched its highest level since 2002. It has since eased a bit and stood at 5.24 per cent late on Friday. US bond trading was closed Monday for the Columbus Day holiday.

Higher mortgage rates have been weighing on the housing market and Wall Street will get an update on home sales on Tuesday.

The latest round of corporate earnings updates ramps up this week with financial results from banks. Citigroup, JPMorgan Chase and Wells Fargo will report their results on Tuesday and Bank of America will report its results on Wednesday. They have been reporting record profits throughout the year and Wall Street expects more of the same for the latest quarter.

Markets in Europe gained ground and markets in Asia were mostly lower. Markets in Tokyo were closed for a holiday.

AP, Bloomberg

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