Health, financials lift Wall St as Broadcom fails to meet hype

Stock markets on both sides of the Atlantic continued to march higher, with healthcare and financial stocks such as UnitedHealth Group and Goldman Sachs driving Wall Street higher as Broadcom’s earnings failed to meet hyped expectations in the artificial intelligence trade.

Oil prices cooled with Israel and Lebanon agreeing to renew their tentative ceasefire, and US President Donald Trump saying talks with Iran were in their final stages.

Currency markets largely ignored a report that Bank of Japan officials were considering a quarter-point rate hike when they meet later this month.

And Australasian markets are expected to open on a firmer footing in what’s been a soft week for New Zealand’s S&P/NZX 50 index, with no local data scheduled for today and Sanford returning from its trading halt after Ngāi Tahu’s investment arm halved its stake in the fishing group.

New highs

The Dow Jones Industrial Average led gains on Wall Street, up 1.8% in late trading, with UnitedHealth leading the blue-chip bourse as it climbed 5%, while Goldman Sachs led financial stocks including JPMorgan Chase and American Express higher.

Blackstone surged 7.9% after saying it would limit redemptions in its flagship private credit fund, a day after Switzerland’s Partners Group throttled withdrawal requests from one of its private equity funds. Partners clawed back some of its earlier losses after saying it would largely meet redemption requests for May.

Meanwhile, Broadcom slumped 13% after missing hyped-up expectations, weighing on semiconductor and other AI related stocks, with the tech-heavy Nasdaq Composite nudging up 0.2%. The S&P 500 rose 0.5%, while across the Atlantic the UK’s FTSE 100 rose 0.3%, Germany’s DAX gained 0.6% and France’s CAC 40 advanced 1.2%.

“Falling oil prices, lower bond yields and a sharp drop in market volatility improved investor sentiment, although weakness across several high-profile AI and semiconductor stocks may temper enthusiasm for growth names,” Moomoo market strategy consultant Greg Boland said in a note. “For the NZX, the combination of record highs on Wall Street, lower oil prices and a subdued VIX points to a firmer start, although investors may remain cautious ahead of the payrolls data and further developments in the Middle East.”

Tense times

Brent crude oil futures fell 2.6% to US$95.25 a barrel as Israel and Lebanon agreed to renew their ceasefire, although Hezbollah militants rejected parts of the plan. The Polymarket prediction market was pricing in a 25% chance of a lasting ceasefire between the US and Iran by the end of the month, and a 38% chance by the end of July.

The kiwi dollar traded at 93.93 yen at 7am in Auckland from 93.89 yen yesterday after Bloomberg reported that a rate hike was a live possibility at the Bank of Japan’s policy review this month, with potential further increases later in the year. The kiwi traded at 58.70 US cents from 58.73 cents yesterday.

Stuart Ritson, a senior interest rate strategist at Bank of New Zealand, said US-Japan rate differentials continued to weigh on the yen, but that currency traders largely ignored the report.

Australasian markets are set to follow Wall Street’s lead, with futures pointing to a 0.3% gain for Australia’s S&P/ASX 200 index when trading opens across the Tasman.

New Zealand’s NZX50 has dropped 1.1% so far in its shortened week of trading.

Fishing group Sanford resumes trading today after Ngāi Tahu Holdings sold almost half its stake at a 3.6% discount in a block trade, reducing its holding to 10%.

Reporting by Paul McBeth. Image from Robb Miller on Unsplash.