Wall Street stays in record territory with tech still in vogue

Wall Street’s S&P 500 tested new records with tech companies still in the ascendency, with the likes of Sandisk, Workday and Western Digital leading the benchmark higher, with producer price inflation in check and South Korea’s Kospi back in bull market territory.

The artificial intelligence sector remained in vogue with investors in Anthropic reportedly eyeing a US$2 trillion valuation for the Claude chatbot developer, while Alphabet’s Google revealed its latest Gemini model and OpenAI cycled through another chief revenue officer.

Oil prices eased as the stalemate in the Middle East continued, with reports that the US was rotating its aircraft carrier in the region, while Ukraine offered a suggestion to Russia that both sides stop strikes on civilian targets in the Black Sea amid warnings that increasingly intense strikes on ports and vessels were threatening global food supplies.

And Australian futures were pointing to a soft start to the trading day across the Tasman with QBE Insurance and Abacus Storage King due to report today, while Statistics New Zealand releases its monthly travel and migration data and the BusinessNZ-BNZ performance of manufacturing index is scheduled.

Rarefied air

The S&P 500 was up 0.7% in late trading and the tech-heavy Nasdaq Composite advanced 0.9%, with the Dow Jones Industrial Average marginally higher, as slowing producer price inflation reaffirmed expectations that the Federal Reserve won’t need to hike its federal funds rate at next month’s review.

Tech companies were among the biggest gainers with the AI trade in full swing as the Kospi returned to bull market territory – having jumped 20% from its low – as Samsung Electronics and SK Hynix rallied, while Hong Kong-listed Lenovo surged 20% as it reported record revenues and Chinese chip foundry Semiconductor Manufacturing International Corp lifted revenue and profit as the AI demand squeezes global production capacity.

“The broader AI infrastructure trade remains firmly in focus following this week's strong results from CoreWeave, Super Micro and Nebius,” Moomoo market strategy consultant Greg Boland said in a note. “Investors are increasingly looking beyond AI enthusiasm towards the spending required to build the infrastructure supporting the next phase of growth.”

The Financial Times reported Anthropic investors were targeting a US$2 trillion valuation for the Claude developer in an initial public offering in October, a level that would trump SpaceX’s historic listing.

Meanwhile, Google released a new instalment of its Gemini Flash AI model, but wouldn’t say when its already-delayed Gemini 3.5 Pro was coming out, China’s DeepSeek was hiking prices for its V4 models from Aug 16, and OpenAI said chief revenue officer Denise Dresser was leaving after less than a year in the job, appointing Dali Rajic in her place.

And Advanced Micro Devices said it planned to raise as much as US$5 billion in its biggest US-dollar bond sale in the latest AI-related debt issuance.

Nikkei Asia reported the Japanese government was eyeing ways to promote AI, while imposing guardrails to prevent misuse.

European stock markets were more muted, with the UK’s FTSE 100 down 0.6%, while Germany’s DAX dipped 0.1% and France’s CAC 40 slipped 0.3%.

Going nowhere

Brent crude oil futures were down 2.4% at US$86.89 a barrel at 7am in Auckland, with little news coming out of the Middle East over the US-Iran conflict. The Wall Street Journal reported the USS George Washington was being prepared to replace the USS Abraham Lincoln in a scheduled rotation.

A new report from the White House claimed countries were routing exports through third countries to avoid US tariffs, estimating annual tax revenue losses of between US$19 billion and US$26 billion, name-checking China as sending goods to a range of countries to sidestep the levies.

Mexico’s government was reportedly pushing for the US to lower tariffs on North American cars in negotiations to rework the US-Mexico-Canada agreement.

Meanwhile, AP Moller-Maersk rallied after the Danish shipping group raised its annual guidance for a second time in less than three months as increased freight rates and strong demand in Asia buoyed its outlook.

And German travel group TUI said Spain and Italy were hitting tourism capacity limits, prompting travellers to look for alternative destinations such as Egypt and Turkey.

The kiwi dollar rose to 93.29 yen at 7am from 92.89 yen yesterday after Bloomberg reported the Japanese government supported a near-term hike by the Bank of Japan, following the coordinated intervention with the US.

Australian futures were pointing to a 0.4% decline for the S&P/ASX 200 index when trading opens on the other side of the Tasman, while the kiwi traded at 58.49 US cents from 58.32 cents yesterday.

Moomoo’s Boland said New Zealand’s S&P/NZX 50 index would likely open on the front foot despite the cautious signal across the Tasman after yesterday’s Reserve Bank survey of expectations tamped down domestic inflation concerns.

“The softer US inflation data is supportive for global equities and New Zealand interest-rate expectations, while lower oil prices provide another positive,” he said. “The key question now is whether falling inflation and lower rate expectations can keep the NZX and global equity markets pushing higher from here.”

Reporting by Paul McBeth. Image from Adi Goldstein on Unsplash.