Market Highlights: Microsoft's results disappoint, dragging the beaten-up Nasdaq down further

The ASX is expected to rise when trading opens on Wednesday
Tech stocks dropped after Microsoft’s weaker-than-expected Azure growth results
Elon Musk’s backing of Trump and controversial AI video on X are sparking debate

The ASX200 index is expected to rebound when the market opens on Wednesday. At 8am AEST, the ASX200 futures contract was pointing up by 0.4%.

Overnight, nervous US investors sold off megatech stocks ahead of Microsoft’s results announcement, pushing the Nasdaq lower by 1.28%.

The S&P 500 closed the day down by 0.5%, while the blue chips Dow Jones index lifted by 0.50%.

Microsoft’s shares fell almost 1% and a further 3% after the bell, as its Azure cloud service showed slower quarterly growth, disappointing investors who had been eager to see returns from the company’s substantial investments in AI products.

Microsoft’s total revenue in Q4, however, increased 15% to US $64.7 billion.

“If the Fed does not signal a September rate cut, markets could get a bit ugly given recent tech weakness – especially if earnings underwhelm,” Tom Essaye at The Sevens Report told Bloomberg.

Starbucks Corp jumped almost 6% despite posting a second straight quarter of falling sales.

Pinterest Inc. plunged 11% post hours after warning that its revenue for the current quarter will fall short of analysts’ expectations.

Online dating platform Match Group lifted 8% after announcing it will reduce its global workforce by 6% as it discontinues livestreaming features on several of its dating apps.

Merck & Co, meanwhile, got hit 10% after weaker sales of its Gardasil HPV vaccine in China affected quarterly profits, even though overall profit and sales exceeded Wall Street expectations.

Back home, local investors will be closely watching the June quarter consumer price index, due at 11:30am AEST. This data could influence the RBA’s decision on whether to increase interest rates in August.

Retail sales data will also be released at the same time, 11:30am.

Musk’s AI video on X is sparking debate

Elon Musk’s recent support for Donald Trump has made him a significant figure in the former president’s campaign.

Although the exact amount of money he’s contributing to the pro-Trump super PAC (political action committee) he helped establish is unknown, he is actively promoting MAGA-aligned views through X, the platform he owns.

This weekend, Musk stirred controversy by posting a video on X featuring an AI-generated voice mimicking Kamala Harris.

The video described her as the “ultimate diversity hire” who spent four years under the guidance of President Biden, who has “exposed his senility”.

Musk commented on the video, calling it “amazing”, but did not reveal that it was AI-generated, which may be in violation of X’s own policy against sharing manipulated content without any disclosure.

Musk might view a Trump presidency as a favourable alternative to his strained relationship with President Biden.

He believes a Republican administration could be more favourable in awarding defence contracts to SpaceX.

Additionally, Musk has suggested that Trump’s plan to eliminate EV tax credits would disadvantage Tesla’s rivals more than Tesla itself.

Back to markets…

Gold price fell by 1% to US$2,409.35 an ounce.

Oil prices were down by a further 0.8%, with Brent crude now trading at US$79.11 a barrel.

The benchmark 10-year US Treasury yield fell by a further 4 basis points (bond prices higher) to 4.14%.

The Aussie dollar slipped by 0.15% US65.40 cents.

The iron ore price tumbled by 2.5% to below US$100 at US$99.30 a tonne.

Bitcoin meanwhile was down almost 2% in the past 24 hours to US$66,268 while Ethereum also dropped by 2% to US$3,283.

5 ASX small caps to watch today

GTI Energy (ASX:GTR)
GTR eported a positive start to its drilling campaign at the Lo Herma ISR Uranium Project in Wyoming’s Powder River Basin. The company has completed the first 10 out of 76 planned drill holes. Early results are promising, with the most notable findings being 14.5 feet of mineralization at 0.064% eU3O8, and 16.5 feet at 0.054% eU3O8 from two of the drill holes. Drilling is moving ahead of schedule, with the team completing 1,908 meters (6,260 feet) so far and averaging over 610 meters (2,000 feet) of drilling per day. The results so far show good mineralisation. Eight out of 10 holes have encountered mineralisation along the targeted trend, and the drilling is expected to continue through the end of Q3.

iTech Minerals (ASX:ITM)
ITM has confirmed the presence of spodumene, a key lithium-bearing mineral, at the GMF1 Pegmatite in Reynolds Range, NT. Analysis of samples from GMF1 shows spodumene content of 84% and 83%. The company had previously reported high-grade assay results from the GMF Pegmatite, reaching up to 8.24% Li2O. Recent fieldwork has also identified fine-grained spodumene at nearby pegmatites, including Mt Stafford and GMF2. ITM has now confirmed multiple spodumene-bearing pegmatites extending over 4.5 kilometers, with many more still to be explored.

West Cobar Metals (ASX:WC1)
West Cobar has reported promising results from recent tests at its Salazar Project in WA. The tests, which are part of a broader effort to refine the project’s processing methods, showed excellent scandium extraction rates. Using hydrochloric acid (HCl), 91% of scandium was extracted from upper saprolite and 90% from lower saprolite in 24-hour tests. With sulfuric acid (H2SO4), the extraction rates were even higher, at 92% for upper saprolite and 70% for lower saprolite. These results are a significant step forward in validating and improving the project’s processing flowsheet and suggest that scandium could become a major asset for the Salazar Project.

Ordell Minerals (ASX:ORD)
Ordell has begun its first drilling program at the Barimaia Gold Project in WA, following its ASX listing. The initial 2,600-meter drilling aims to explore and expand known gold areas over a 2.5-kilometer stretch. The project shares similar geology with Ramelius Resources’ Eridanus deposit and has shown promising results from previous exploration, including high-grade gold hits. A follow-up drilling phase is scheduled for September to further investigate these findings.

West African Resources (ASX:WAF)
WAF has reported promising results from its first grade control drilling at the Kiaka Gold Project in Burkina Faso. The drilling has uncovered thick zones of gold mineralization, with notable findings including 30 meters at 4.1 grams per tonne and several other strong gold intersections. These results confirm the resource model and support the planned open-pit strip ratio. The grade control drilling is on track and budget to support the start of mining in the first quarter of 2025.

At Stockhead we tell it like it is. While GTI Energy is a Stockhead advertiser, it did not sponsor this article.