Wall St mixed as SoftBank’s Nvidia exit weighs on Nasdaq

Stocks on Wall Street were mixed with the tech-heavy Nasdaq Composite nudging lower as investors reassessed the stretched valuations underpinning the artificial intelligence trade, with SoftBank’s exiting chipmaker Nvidia to boost its investment in OpenAI and cloud computing provider CoreWeave facing delays at a third-party data centre.

Meanwhile, the blue chip Dow Jones Industrial Average was led higher by Nike and Merck & Co, while European markets were broadly stronger amid the lingering relief of the protracted US federal government shutdown coming to an end.

Sharesies’ favourite Rocket Lab was among gainers on the Nasdaq as the space company notched up record revenue and margins in the September quarter, while meme stocks Rigetti Computing and Beyond Meat sank on their respective results.

Australian futures are pointing to a positive start for the ASX when trading opens across the Tasman, while Mainfreight’s first-half earnings are the main event in New Zealand with investors bracing for a soft result.

Parting is such sweet sorrow

The tech-heavy Nasdaq Composite was down 0.3% in late trading with chipmaker Nvidia sliding 2.8% amid rising nervousness about stretched valuations.

Japan’s SoftBank exited its position in the world’s most valuable company to redeploy those funds in OpenAI, which is on a slower track to profitability than its smaller rival Anthropic, according to a Wall Street Journal report.

Cloud computing services firm CoreWeave dropped sank 15% as investors looked past its growing revenue to a warning that delays at a third-party data centre would push out capital spending and revenue from that customer to later periods.

Still, Wall Street’s other major indices joined the rally in Europe as investors were generally relieved by US policymakers making headway into ending the protracted federal government shutdown, which has delayed official economic releases and disrupted flights.

“US equites are marginally lower in afternoon trading but have largely maintained the gain from the previous session on optimism the longest US government shutdown is coming to an end,” Bank of New Zealand senior interest rate strategist Stuart Ritson said in a note.

The Dow Jones Industrial Average was up 1% in late trading, with Nike and Merck & Co leading the blue chip index higher, while the S&P 500 increased 0.2%.

Old friends

Local favourite Rocket Lab gained 3.8%, pulling back from a sharper increase during afterhours trading, after the space company beat expectations with record revenue and margins.

Among meme stocks reporting, Beyond Meat fell 3.6%, paring a steeper decline, after posting a decline in September quarter revenue and reporting a wider loss as it wrote down the value of certain assets, while Rigetti Computing dropped 6% after its revenue growth missed expectations.

Across the Atlantic, stock markets were broadly stronger, with the UK’s FTSE 100 climbing 1.2% led by Vodafone as the telco raised its earnings outlook, while Bayer and Adidas paced Germany’s DAX 30 as it rose 0.5% and automakers Stellantis and Renault were among gainers for France’s CAC 40 as it advanced 1.3%.

The kiwi dollar traded at 56.60 US cents at 7am in Auckland from 56.46 cents yesterday after ADP figures showed US private payrolls declined through October, and traded at 42.96 British pence from 42.87 pence after the UK’s unemployment rate rose to 5%, a higher level than expected.

US bond markets were closed for the Veterans Day holiday.

Australian futures are pointing to a 0.2% gain for the S&P/ASX 200 index when trading opens across the Tasman, with global logistics firm Mainfreight’s first-half result the main event in New Zealand.

Forsyth Barr analysts expect to see a decline in pre-tax earnings for the logistics firm, and said there’s a risk for the company to downgrade its annual guidance. Shipping giant Maersk last week raised the lower end of its earnings guidance, while noting trade volumes from China to the US are still declining.

Carpetmaker Bremworth is holding its annual meeting in Auckland today, while Statistics New Zealand will release September quarter concrete figures today.

Reporting by Paul McBeth. Image from Aaron Burden on Unsplash.