US tech recovers from rout; Israel-Iran tensions cool

Tech stocks on Wall Street bounced back from their Friday selloff, with chip stocks including Micron Technology and Intel among those leading the charge as investors regained their confidence in the artificial intelligence trade, while Nvidia chief executive Jensen Huang called the slump a buying opportunity.

Apple missed the AI boom after the iPhone maker’s latest push into artificial intelligence and Siri update failed to win over investors.

A pause in the latest round of missile strikes between Iran and Israel helped calm investors' nerves, with oil prices coming off their highs and US President Donald Trump talking up the status of ceasefire negotiations, although prediction market pricing remains sceptical.

Australia’s ASX returns from the long weekend, with futures pointing to a soft start to the day across the Tasman, while Infratil and Argosy Property going ex-dividend today will weigh on New Zealand’s S&P/NZX 50 gross index.

Buy the dip

The Nasdaq Composite climbed 1.1% in late trading as tech stocks bounced back from their sharp selloff on Friday, with chipmakers and semiconductor stocks among those leading the charge. Nvidia CEO Jensen Huang said the slump was a buying opportunity given the AI buildout was only just starting.

The blue-chip Dow Jones Industrial Average was marginally weaker, with Travelers Cos, Sherwin-Williams and Merck & Co at the bottom of the leaderboard, while the S&P 500 increased 0.5%.

Intel surged 11% after The Information website reported Alphabet’s Google ordered 3 million AI chips from the company, while Apple dipped after unveiling its latest AI platform and an update for its Siri digital assistant as it attempted to catch up with the other big tech firms.

“Investors will be focused on this week's key US inflation data, which could determine whether the recent technology-led correction stabilises or extends further,” Moomoo market strategy consultant Greg Boland said in a note. “On the NZX today, investors are likely to focus on exporters such as Fisher & Paykel Healthcare, a2 Milk and Fonterra, which continue to benefit from the relatively weaker New Zealand dollar, while Infratil will be closely watched after the strong rebound in US semiconductor and AI-related stocks overnight.”

The kiwi traded at 58.10 US cents at 7am in Auckland from 58.02 cents yesterday.

European stock markets were more muted, with the UK’s FTSE 100 up 0.1%, Germany’s DAX falling 0.6% and France’s CAC 40 dipped 0.2%.

Calmer nerves

The CBOE volatility index, known as Wall Street’s fear gauge, fell 13% to 18.63 as tensions between Israel and Iran eased, with the Middle East nations ending their latest round of missile strikes on each other. President Trump said peace negotiations were proceeding, while the Polymarket prediction market was pricing in a 17% chance of a deal by the end of the month and a 31% chance by the end of July.

Brent crude oil futures rose 1.2% to US$94.16 a barrel, coming back from earlier highs. US airlines were broadly weaker, setting a soft lead for the likes of Air New Zealand and Australia’s Qantas Airways.

Australia returns from the long weekend, having missed the sharp decline on Monday. Futures are pointing to a 0.3% gain for the S&P/ASX 200 index when trading opens across the Tasman.

Moomoo’s Boland said the NZX50 was expected to have a flat start to the day in the volatile environment.

Among companies going ex-dividend today – shedding rights to their upcoming shareholder returns – are Infratil and Argosy.

Local data includes Statistics New Zealand’s March quarter manufacturing survey, which will help economists firm up their forecasts for gross domestic product.

Reporting by Paul McBeth. Image from Luca Bravo on Unsplash.