Meta’s Muse spurs tech rally on Wall Street; oil slides

Tech stocks roared back into life with Meta Platforms surging as its new Muse artificial intelligence agent hit number one in Apple’s App Store and prompted a hike in the social media giant’s target price by Wells Fargo.

Stock markets were stronger on both sides of the Atlantic as oil prices continued to fall, with US President Donald Trump’s comments that he was prepared to meet his Iranian counterpart Masoud Pezeshkian on the sidelines of this week’s United Nations General Assembly fuelling optimism that there could be a cooling in the Middle East conflict.

Meanwhile, Paramount Skydance reached a deal with California and 11 other states to clear their opposition to the media giant’s proposed acquisition of Warner Bros Discovery, with a pledge to bring more film production to the US.

And Australian futures are pointing to a positive start to the day for the ASX, with a speech from Reserve Bank of Australia governor Michele Bullock the key event for investors watching for whether more rate hikes are coming across the Tasman.

Finding a muse

The Nasdaq Composite jumped 2.3% in late trading, with Meta surging 12% after the social media giant’s new Muse model topped Apple’s App Store downloads and attracted an upgraded price target from Wells Fargo analysts. Meanwhile, Amazon blocked the AI agent from its website after Meta declined a request to remove it.

Semiconductor firms and chipmakers such as Nvidia, Advanced Micro Devices and Micron Technology drove gains on Wall Street, with investors recovering their appetite for the AI trade, with the S&P 500 up 1.6%. The Dow Jones Industrial Average advanced 0.6%, with Nvidia, Merck & Co and Amazon leading the blue chip index higher.

Alphabet’s Google announced pricing and hardware specifications for its Googlebook laptop, with inbuilt AI features, while Bloomberg reported SoftBank Group was seeking more than US$11 billion in a junk bond issue to fund its follow-on investment in OpenAI.

And OpenAI urged the US to take the lead in setting standards for AI development.

Softer oil prices added to the optimistic start to the week for the Northern Hemisphere, with Brent crude oil futures down 3.2% at US$100.50 a barrel at 7am in Auckland.

Presidential options

US President Donald Trump said he would probably be open to meeting his Iranian counterpart on the sidelines of the UN General Assembly in New York this week. Separately, Trump was expected to meet Gulf leaders to discuss the Middle East conflict, and would meet Chinese President Xi Jinping.

“Diplomatic efforts to halt the conflict also appear to have stepped up a gear, and President Trump said he would probably be open to meeting Iranian President Pezeshkian on the sidelines of the UN General Assembly in New York this week,” Bank of New Zealand senior market strategist Jason Wong said in a note.

Paramount reached a settlement with California and 11 other states to remove an obstacle to its US$110 billion acquisition of Warner Bros, promising to produce 30 movies in each of the first two years, and 32 in each of the following three years. The deal also included editorial independence for the CBS and CNN networks.

Stock markets rallied across the Atlantic, with the UK’s FTSE 100 up 0.8%, Germany’s DAX gaining 1.1% and France’s CAC 40 advancing 0.9%.

Germany’s Volkswagen dipped after saying it would accelerate its restructuring programme in the face of nationwide protests by autoworkers, and following a profit warning on rising costs and heightened competition from Asian rivals.

Meanwhile, Denmark’s Novo Nordisk sank 7.7% after the Ozempic maker’s new plan to revive growth was met with scepticism by investors.

And French lender Societe Generale rallied after saying it would cut costs as part of a plan to boost profitability.

That positive move is set to continue into the antipodes, with Australian futures pointing to a 0.4% gain for the S&P/ASX 200 index when trading opens across the Tasman. The kiwi dollar traded at 57.15 US cents at 7am from 57.23 cents yesterday.

RBA governor Bullock is scheduled to take part in a fireside chat with the Committee for Economic Development of Australia, with investors watching for more clues on whether the central bank will deliver a rate hike next week, which is largely priced in by bond traders.

No local data are scheduled for today, and there aren’t any companies going ex-dividend on the NZX. Minnow waste management firm WasteCo holds its annual meeting in Christchurch, while glass products maker Metro Performance Glass is holding an online annual meeting.

Reporting by Paul McBeth. Image from Julio Lopez on Unsplash.