US tech rally continues as Meta’s share sale oversubscribed

Stocks on Wall Street rose for a second day, with tech stocks continuing to be buoyed by the prospect of artificial intelligence giant Anthropic’s upcoming initial public offering, while Meta Platforms’ stock sale attracted heavy demand.

Oil prices continued to ease with peace back on the agenda as Iran, Saudi Arabia, Pakistan and Turkey met to discuss ways to lower tensions in the Middle East, while Russian President Vladimir Putin spoke with Finnish President Alexander Stubb and Norwegian prime minister Jonas Gahr Støre to revive ceasefire negotiations.

Boeing slumped after the planemaker said it will miss its delivery target and pushed out its outlook for free cash flow growth.

And New Zealand’s Reserve Bank is expected to hike the official cash rate at today’s policy review, while Australian futures are pointing to a positive start to the day for the ASX.

Building anticipation

US tech companies extended their gains as the upcoming Anthropic IPO continued to keep spirits high on the volatile AI trade, with Nvidia, Broadcom, Micron Technology and Advanced Micro Devices among the day’s gainers.

Meta dipped 1.2% after Bloomberg reported its US$25 billion share sale was oversubscribed by five times in the first component of its upsized US$98 billion equity raising. The 15 biggest investors accounted for about 70% of the shares.

The Nasdaq Composite climbed 1.1% in late trading and the S&P 500 advanced 0.5%, while the Dow Jones Industrial Average was more subdued as a 9.4% slump for Boeing weighed on the blue-chip index. The planemaker said it would miss its 737 production and jet delivery targets this year and pushed out its free cash flow growth target by a year, and gave an outlook below analysts’ expectations.

Meanwhile, Coca-Cola Co dipped as it reported lower-than-expected sales volumes in North America, while PayPal Holdings gained after raising its earnings guidance and United Parcel Service climbed 5.4% after the carrier raised its earnings outlook on its recent restructuring efforts.

Royal Caribbean Group jumped as strong bookings prompted an upgrade to its earnings outlook.

Oil prices continued to ease, with Brent crude oil futures down 1.8% at US$113.72 a barrel at 7am in Auckland as Iran, Saudi Arabia, Pakistan and Turkey agreed to continue talking on regional peace and security after officials met in Tehran on Monday. Separately, Oman said it produced a draft outline for a temporary deal with Iran to restore traffic through the Strait of Hormuz.

“Diplomatic efforts to end the US-Iran conflict have intensified, with a number of meetings between mediators and senior officials from various countries since the weekend, and more scheduled this week,” Bank of New Zealand senior markets strategist Jason Wong said in a note. “One aim is to head off a rumoured escalation in hostilities after the US mid-term elections.”

Building peace

Meanwhile, efforts to broker a ceasefire between Russia and Ukraine stepped up a gear, with Putin speaking to Ukraine’s European allies for the first time in more than a year. Future negotiations are set to take place next month.

And Israel’s parliamentary elections are also in view, as polling shows prime minister Benjamin Netanyahu almost tied with his main challenger Gadi Eisenkot, who is the favourite in Polymarket’s pricing.

European markets were mixed as the UK’s FTSE 100 fell 0.8%, with earnings from HSBC and Reckitt Benckiser disappointing investors, while Germany’s DAX gained 0.7% and France’s CAC 40 advanced 0.8%.

Australian futures are pointing to a 0.1% gain for the S&P/ASX 200 index when trading opens across the Tasman, while the kiwi dollar fell to 56.83 US cents at 7am from 57.05 cents yesterday.

New Zealand’s Reserve Bank is expected to raise the OCR by 25 basis points to 3% when it reviews policy today, with core inflation remaining sticky in the September quarter.

“We’ll be looking for the RBNZ to signal that further hikes will likely be required,” BNZ’s Wong said. “A lack of intent to address NZ’s high-inflation backdrop, as we saw in September, would see the market react with lower rates and a weaker NZ dollar.”

Other central banks meeting this week include the Federal Reserve on Wednesday in the US, the European Central Bank on Thursday and the Bank of Japan on Friday.

Local data today include Statistics New Zealand’s monthly employment figures, while Comvita and South Port NZ hold their annual meetings today.

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