Wall Street mixed as Fed’s Warsh says inflation threat eases
US President Trump’s businesses pull in US$2.2 billion in first year of his second term.
Stocks on Wall Street were mixed as US Federal Reserve chair Kevin Warsh said inflation risks have eased in recent weeks, and reaffirmed the central bank’s commitment to bring down the pace of rising prices.
Manufacturers and banks were among those pacing gains in the US, while tech stocks were a mixed bag with SpaceX sliding on disputed reports the firm has developed a prototype artificial intelligence-powered device and Meta Platforms surging on plans to develop a cloud infrastructure business.
Meanwhile, US President Donald Trump’s annual income returns showed his businesses pulled in US$2.2 billion in the first year of his second term, with crypto making the biggest contribution.
And Cotality data show New Zealand’s house prices fell for a third month in June ahead of Statistics New Zealand’s monthly building consents figures, while Australian futures are pointing to a muted start in the antipodes when trading opens across the Tasman.
Central thinking
Fed chair Warsh told the European Central Bank’s annual forum in Sintra, Portugal that inflation expectations had eased over the past four weeks and that the Fed would deliver on its price stability target, while continuing to refrain from offering forward guidance on upcoming decisions.
The kiwi dollar was unchanged at 56.74 US cents at 7am in Auckland from the day prior, with investors digesting Warsh’s comments and US manufacturing data showing activity continued to grow in June. Brent crude oil futures fell 2.2% to US$71.38 a barrel.
Stocks on Wall Street were mixed, with the tech-heavy Nasdaq Composite slipping 0.3% while the blue-chip Dow Jones Industrial Average nudged up 0.1%, with Salesforce, Caterpillar and American Express leading the index higher. The S&P 500 was marginally stronger.
“Investor attention now turns squarely to tonight's US non-farm payrolls report after weaker-than-expected ADP private payrolls showed 98,000 jobs were added in June, below expectations of 113,000, while ISM Manufacturing PMI slowed to 53.3, also missing forecasts,” Moomoo market strategy consultant Greg Boland said in a note. “The payrolls report is likely to determine whether markets continue pricing in another Federal Reserve rate increase later this year.”
Manufacturers and financial stocks were among the gainers on Wall Street, while semiconductor and chip companies were broadly weaker. Across the Atlantic, the UK’s FTSE 100 dipped 0.2%, Germany’s DAX rose 0.2% and France’s CAC 40 slid 0.8%.
A device for life
SpaceX sank 7.9% after the Wall Street Journal reported the company showed investors a prototype for a handheld device on its own operating system to integrate AI technology. Chief executive Elon Musk said the report was “utterly false” in a post on the X social media platform.
Meanwhile, Meta jumped 9.5% after announcing plans for a cloud infrastructure business, selling access to AI computing power and models.
Investor Michael Burry expanded his short positions on the AI trade, adding Tesla, Caterpillar, Applied Materials and an exchange-traded fund tracking chipmakers to his bet.
Italian tech company Bending Spoons, which snapped up brands such as AOL, Eventbrite and Vimeo, surged 40% in its debut after raising US$1.68 billion in an initial public offering on the Nasdaq.
Meanwhile, US President Trump’s annual income statement showed crypto contributed US$1.4 billion to his US$2.2 billion personal income in the first year of his presidency, with real estate contributing another US$575 million. Bitcoin rose 2.5% to US$60,200 at 7am in Auckland.
Australian futures are pointing to a 0.2% decline for the S&P/ASX 200 index when trading opens across the Tasman.
Locally, retirement village operators tied to the property market will be in focus after Cotality figures showed house prices fell 0.2% in June for a third month in a row.
Stats NZ’s building consents for June are due today, while the government’s financial statements for the 11 months ended May 31 are also expected.
Reporting by Paul McBeth. Image from Robb Miller on Unsplash.
