Google-parent Alphabet paced gains among most of the Magnificent 7 megastocks after the search engine giant’s enjoyed revenue growth in the June quarter, while ramping up investment in the artificial intelligence boom.
Electric vehicle-maker Tesla was the outlier among the majors as its shares sank 8.4% with chief executive Elon Musk urging shareholders to look through the slump in sales to its burgeoning robotaxi and Optimus robot units.
Stocks on Wall Street were mixed as investors wade through a raft of earnings from the likes of American Airlines, IBM, T-Mobile, Mattel and Dow.
Meanwhile, European markets were broadly stronger after the European Central Bank stuck to its script in keeping rates on hold and as major lenders Deutsche Bank and BNP Paribas reported strong results.
Easy as ABC
Alphabet was up 1.7% in late trading after Google’s parent reported strong revenue growth in its cloud business on the AI boom, where the Big Tech company is directing more and more investment. That flowed through to most of the Magnificent 7 megastocks, with Nvidia, Amazon, Apple, Microsoft, and Meta Platforms all on the green side of the ledger.
IBM was another beneficiary of increased cloud software sales, although its shares declined on the day.
Meanwhile, Tesla sank 8.4% after the EV maker reported a slump in June quarter auto sales, which chief Elon Musk urged investors to look through towards the robotaxi and robot units, where he sees future value.
The Nasdaq Composite was up 0.4% in late trading, while the Dow Jones Industrial Average slipped 0.5%.
Earnings on Wall Street were on the weak side with American Airlines sinking 9% after the carrier warned it expects to post a loss in the June quarter, while Southwest Airlines posted weaker profit and revenue.
Toymaker Mattel declined after dialling back its earnings outlook and chemical maker Dow posted a quarterly loss and halved its dividend amid the global trade uncertainty.
Telecommunications carrier T-Mobile rallied after beating analysts’ earnings forecasts.
Across the Atlantic, stock markets were broadly stronger with the UK’s FTSE 100 up 0.9% and Germany’s DAX 30 nudging up 0.2%, while France’s CAC 40 slipped 0.4%.
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The European Central Bank kept its key rates unchanged on Thursday as expected, with the US tariff regime continuing to keep the outlook murky.
“The bank indicated it is in a ‘wait-and-watch’ mode ahead of the August 1 deadline for a trade deal between the EU and the US,” Bank of New Zealand senior interest rate strategist Stuart Ritson said in a note. “There is a cumulative 18 basis points of easing priced by the December meeting, down from 22 basis points ahead of the rates decision.”
Markets were buoyed by strong results from Germany’s Duetsche Bank and France’s BNP Paribas, continuing the trend among major lenders.
The European Union is working towards a similar deal to Japan’s with the US to take the harder edges of US President Donald Trump’s upcoming tariff regime.
Trump will visit the US Federal Reserve’s headquarters in Washington on Thursday as tensions between the White House and the central bank remain high.
Australian futures are pointing to a 0.5% decline for the S&P/ASX 200 index when trading opens today, while the kiwi dollar traded at 60.41 US cents at 7am in Auckland from 60.55 cents yesterday.
Australia’s Macquarie Group was rebuked by shareholders at Thursday’s annual meeting when its remuneration report got its first strike.
No local data are scheduled for today, while NZX-listed minnow financier General Capital holds its annual meeting in Auckland today.
Reporting by Paul McBeth. Image from Solen Feyissa on Unsplash.
