Wall Street mixed as investors await US midterms

US chipmakers such as Nvidia and Broadcom were leading tech stocks higher on a mixed day for Wall Street in a typically modest rally running into the US midterm election, which is expected to hand control of the House of Representatives to the Democratic party.

Oil prices eased amid reports that the US and Iran are reviewing new proposals to avoid an escalation in the Middle East conflict, even as US President Donald Trump said American forces conducted strikes on some Iranian targets.

Apple dipped after the iPhone maker’s growth outlook left investors cold, while Palantir Technologies declined amid concerns the data analysis firm won’t be able to maintain its rapid pace of growth.

And Australian futures are pointing to a sluggish start to the day for the ASX, while local investors await Statistics New Zealand’s upcoming labour data, which are expected to show a dip in the unemployment rate as jobs growth outpaces an increase in the number of people looking for work.

America decides

The US public is voting in the midterm elections, with polls and prediction market pricing pointing to the Democrats taking control of the House of Representatives, and potentially winning the Senate.

Stocks on Wall Street were mixed ahead of early election results, with the tech-heavy Nasdaq Composite and S&P 500 both up 0.5%, while the Dow Jones Industrial Average dipped 0.4%. Sherwin-Williams, Home Depot and Merck & Co led the blue-chip index lower.

Investor appetite for artificial intelligence-linked stocks drove gains on the Nasdaq, with the Philadelphia semiconductor index – which tracks the 30 biggest chipmakers – up 3.2% in late trading. Earnings from Advanced Micro Devices after the bell are the next test for the sector.

“For investors, the immediate focus is whether the technology rebound can broaden beyond chipmakers, and whether AMD’s results provide further evidence that AI spending is translating into earnings growth,” Moomoo market strategy consultant Greg Boland said in a note.

Apple was down 1.8% in late trading after the iPhone maker’s new chief executive John Ternus warned of weaker margins as the cost of memory chips continues to rise. Meanwhile, Palantir dipped 1.4% as quarterly revenue surged, with investors uncertain about whether the company will be able to maintain its pace of growth.

Giving peace a chance

Brent crude oil futures fell 1.4% to US$103.31 a barrel at 7am in Auckland in a whippy day of trading, with Bloomberg reporting that Qatari-mediated talks were making headway in trying to get the US and Iran back to the negotiating table. Still, US strikes on Iranian targets tempered that optimism.

State-owned energy giant Saudi Aramco reported a 35% jump in third-quarter profit, with increased crude volumes and higher oil prices.

European markets were weaker, with the UK’s FTSE 100 sliding 1.1%, Germany’s DAX falling 0.5% and France’s CAC 40 dipping 0.3%.

German airline Deutsche Lufthansa rallied after the carrier lifted quarterly profit as it found ways to offset higher fuel costs through savings and increased revenue, while Bayer advanced as it raised its annual guidance, with a recovery in the pharmaceutical business making up for pressures in its agricultural and consumer health divisions.

Australian futures are pointing to a 0.3% decline for the resources-heavy S&P/ASX 200 index when trading opens across the Tasman, with iron ore and gold prices easing overnight.

The kiwi dollar traded at 56.15 US cents at 7am in Auckland from 56.19 cents yesterday, and was at 80.56 Australian cents from 80.48 cents, after prices rose at the latest Global Dairy Trade event.

The GDT price index rose 3%, with the average winning price at US$4,166 a tonne. Whole milk powder prices gained 5.9% to US$3,971/tonne.

Stats NZ’s labour data today are expected to show the unemployment rate dipping 0.1 of a percentage point to 5.5%, with forecast quarterly jobs growth of 0.4% seen as enough to outweigh an increase in participation. ANZ’s monthly commodity price index is also due.

Meanwhile, Chorus is holding its annual meeting in Auckland.

Reporting by Paul McBeth. Image from Ian Hutchinson on Unsplash.