(June 26) : Stocks in Asia were set for a mixed open Friday after a volatile Wall Street session, where renewed selling in megacap technology shares offset gains fueled by resilient US economic data.
Equity futures for Japan, Hong Kong and South Korea pointed lower, while Australia was set to gain. US futures were little changed after Wall Street erased an early rally fueled by Micron Technology Inc.’s bullish sales forecast. Apple Inc. slid 6.1% after raising prices on Macs, iPads and home devices, unwinding some of the enthusiasm over strong chipmaker forecasts. The Nasdaq 100 Index rose 0.8%, having climbed as much as 2.1% earlier.
US oil steadied on Friday after climbing more than 2% in its previous session after a vessel was struck in the Strait of Hormuz, reviving concerns over shipping through the key waterway even as US-Iran peace talks continue. Meanwhile, better-than-expected US economic data buoyed broader risk sentiment, leading traders to trim bets on Federal Reserve interest-rate hikes this year.
The market’s recent swings highlight investors’ growing unease over whether the technology giants that have powered the equity rally for much of the past two years can continue to justify their lofty valuations. Concerns over AI spending have driven sharp moves in semiconductor stocks this week, and while those worries eased after Micron’s results, volatility in the tech industry remained elevated.
“A few cracks have developed in the tech sector recently,” said Matt Maley at Miller Tabak. “Therefore, we believe it will be extremely important to watch how these hyperscalers trade going forward because if they continue to decline, it’s going to make it very tough for the rest of the market to advance.”
Earlier in the US session, sentiment was buoyed by data showing American consumer spending accelerated in May even as prices rose at the fastest pace in more than three years, suggesting households are weathering the fallout from the Iran war.
See also: Oil holds near three-month low as Iran deal seen boosting supply
The Fed’s preferred inflation gauge, the personal consumption expenditures price index, rose 0.4% in May, below economists’ median estimate for a 0.5% increase. The annual rate accelerated to 4.1%, well above the Fed’s 2% target.
While those figures will likely leave the Fed under pressure to keep interest rates elevated, the recent pullback in energy costs may help ease inflationary pressures in the months ahead.
Traders pared bets on Fed tightening, with swaps pricing about 34 basis points of hikes by December, down from roughly 36 basis points a day earlier. Short-term Treasury yields fell, while the implied odds of a rate increase next month slipped to about one in three.
See also: Asian stocks poised to drop as Fed decision looms
“The worst of inflation and consumer angst may be mostly behind us,” said Brian Jacobsen at Annex Wealth Management. “As long as gasoline prices trend lower, inflation expectations will likely follow suit.”
Elsewhere, OpenAI is leaning toward holding off on an initial public offering until 2027, the New York Times reported, citing three people involved in the company’s deliberations.
In commodities, gold rebounded as traders tempered expectations for interest-rate hikes, while silver advanced 0.8% to US$57.8586 an ounce. Palladium and platinum also gained.
uploaded by Isabelle Francis
