Wall St wavers ahead of jobs report

Stocks on Wall Street remain on edge ahead of delayed jobs data and inflation figures later this week as increasingly uneasy investors remain unsure how quickly the Federal Reserve will cut interest rates in the new year.

Semiconductor firm Broadcom and software firm Oracle extended their declines amid heightened sensitivity about the pace of spending on artificial intelligence infrastructure, while heavyweight chipmaker Nvidia snapped a four-day decline.

Meanwhile, the kiwi dollar clawed back some of yesterday’s losses when Reserve Bank of New Zealand governor Anna Breman reiterated the central view for the local benchmark to stay where it is for the foreseeable future in an attempt to jawbone down wholesale interest rates.

And finance minister Nicola Willis will outline her budget policy statement alongside the half-year fiscal and economic update, which is expected to show the state of the government’s books remain in tough shape.

Waiting room

The volatility index, known as Wall Street’s fear gauge, climbed 4.8% as investors remain nervous ahead of delayed jobs and inflation data, coming a week after the Federal Reserve’s latest rate cut.

The US non-farms payrolls data are expected to show a slowing pace of jobs growth in November, with the unemployment rate nudging higher.

“Ahead of a busy week before Christmas, including the key US employment report tonight, market movements have been modest,” Bank of New Zealand senior market strategist Jason Wong said in a note.

Fed governor Stephen Miran continued his campaign of pushing for steeper cuts to the federal funds rate, while New York Fed president John Wililams said the central bank is well positioned heading into 2026.

Stocks on Wall Street were broadly weaker, with the S&P 500s down 0.2% in late trading and the tech-heavy Nasdaq Composite falling 0.5% as investors remain unconvinced about the ability of AI to deliver the returns needed on the massive infrastructure spending by firms.

Semiconductor company Broadcom fell 5.6% in late trading while Oracle was down 2.4%, although chipmaker giant Nvidia snapped a four-day decline, gaining 1.2%. Bitcoin dropped 3.2% to US$85,723 at 7am in Auckland.

Mining companies Newmont and Freeport-McMoran rallied as gold futures edged up 0.1% to US$4,332 an ounce.

Central planning

Across the Atlantic, stock markets were broadly stronger in Europe with a slew of central bank meetings due this week including the European Central Bank, Sweden’s Riksbank, the Bank of England and Norway’s Norges Bank.

The UK’s FTSE 100 was up 1.1%, while Germany’s DAX 30 gained 0.2% and France’s CAC 40 advanced 0.7%, with lenders among those pacing gains.

The kiwi dollar recovered some of yesterday’s losses, trading at 57.88 US cents at 7am in Auckland from 57.70 cents at 5pm on Monday.

Reserve Bank governor Anna Breman reiterated the central bank’s projection for the official cash rate to remain at 2.25% for the time being with a chance of it going lower, after banks started raising their longer-dated mortgage rates, following moves higher in wholesale rate markets.

BNZ’s Wong said the market took the view that Breman was sending a clear message of some discomfort with the reaction.

Australian futures are pointing to a marginally soft start to the trading day for the S&P/ASX 200 index when it opens.

Local data today include Statistics New Zealand’s partial inflation readings for the month of November, and the Real Estate Institute’s latest sales figures.

Finance minister Nicola Willis will deliver her budget policy statement in releasing the half-year fiscal and economic update, which is expected to show the government’s finances remain stretched.

And The Australian Financial Review’s Street Talk column is reporting Infratil’s CDC Data Centres unit has appointed investment banks to help it raise up to A$5 billion of debt funding to support its investment in new centres.

Reporting by Paul McBeth. Image from Vitaly Gariev on Unsplash.