AI jitters cast a pall over final full trading week of 2026

The antipodes are waking up under a dark cloud this week as Australia reels from a terror attack on Bondi Beach in New South Wales, while ASX futures are pointing to a soft start across the Tasman following the week lead from Wall Street on Friday.

Fears about the pace of growth in the artificial intelligence sector remained elevated on Friday in the US with investors cool on Broadcom’s quarterly earnings as they turn their attention to sales forecasts and future margin, while Federal Reserve officials are sharing their thinking about last week’s divided rate cut as US President Donald Trump gets to the pointy end of picking the central bank’s next chair.

Meanwhile, local medicinal cannabis firm Rua Bioscience got a strong lead from Wall Street after cannabis companies rallied on reports Trump plans to ease federal restrictions on marijuana.

Domestically, the Bank of New Zealand-BusinessNZ services gauge is due today and the Fonterra Shareholders’ Fund holds its annual meeting in Christchurch, although the main events this week are the government’s half-year fiscal and economic update on Tuesday and Statistics New Zealand’s September quarter gross domestic product figures on Thursday.

On alert

Australia is on alert after a terror attack at Bondi Beach in New South Wales left at least 12 people dead and another 29 people wounded after an attack a Hanukkah event on Sunday. Prime minister Anthony Albanese pledged to eradicate the hate and violence behind the country’s worst mass shooting since the 1996 attack in Port Arthur, but has been accused of not doing enough to rein in antisemitism.

Futures are pointing to a 0.6% decline for the S&P/ASX 200 index when trading opens across the Tasman, following a weak end to the week on Wall Street as tech stocks continued to fall out of favour with investors growing wary of the massive spending on AI infrastructure.

The tech-heavy Nasdaq Composite sank 1.7% on Friday, while the Dow Jones Industrial Average declined 0.6%, with semiconductor firm Broadcom sliding 11% after investors cooled on the company’s rapid revenue growth, focusing instead on future sales and margins.

Oracle’s debt-fuelled spending on AI cloud infrastructure has been seen as a bellwether for the sector, with investors uneasy about the returns needed to justify the level of borrowing.

“Concerns about the outlook for artificial intelligence and technology stocks weighed on investor risk sentiment into the weekly close,” BNZ senior interest rate strategist Stuart Ritson said in a note. “A disappointing sales outlook from Broadcom fuelled investor concerns about high valuations for companies linked to the sector.”

Stocks in Europe were also weaker, with the UK’s FTSE 100 down 0.6% on Friday, Germany’s DAX 30 declining 0.5% and France’s CAC 40 dipping 0.2%.

Centrally speaking

Meanwhile, Federal Reserve officials are hitting the speaking circuit after last week’s divided rate cut, with Chicago Fed president Austan Goolsbee saying he expects more reductions next year but wanted to wait for more data inflation in voting against the majority, while Kansas City Fed president Jeff Schmid said he felt inflation is too hot to be easing monetary policy.

Delayed US jobs and inflation data are due this week, while the Bank of Japan’s policy meeting is also in view, with governor Kazuo Ueda expected to lift the benchmark rate a quarter-point to 0.7%, the highest level since 1995.

US President Donald Trump is holding his final round of interviews to replace Fed chair Jerome Powell next year, telling The Wall Street Journal he’s leaning towards picking either National Economic Council director Kevin Hassett or former Fed governor Kevin Warsh.

The kiwi dollar traded at 58.04 US cents at 7am in Auckland from 58.10 cents last week.

NZX-listed Rua Bioscience will come into view in the local trading session after cannabis stocks on Wall Street rallied on Friday amid reports President Trump plans to ease federal restrictions on marijuana and direct agencies to reclassify it as a less dangerous drug.

Local data today include the BNZ-BusinessNZ performance of services index, following its sister manufacturing gauge on Friday which showed a small pickup in industrial activity. Unitholders of the Fonterra Shareholders’ Fund will hold their annual meeting in Christchurch, following last week’s unusually short meeting for the cooperative.

Finance minister Nicola Willis will reveal her half-year update on Tuesday, while Stats NZ’s September quarter GDP data are due on Thursday.

Reporting by Paul McBeth. Image from Roberto Júnior on Unsplash.