Market Highlights: US tech stocks continue slide, Trump found guilty, and 5 ASX small caps to watch

ASX 200 expected to rise by +0.7pc at Friday’s market opening
Tech stocks dragged Wall Street lower
Donald Trump found guilty on all counts

The ASX 200 is poised to bounce back when the market opens on Friday. At 8am AEST, the ASX200 futures contract was pointing up by +0.7%.

Overnight, Wall Street slumped again as the S&P 500 fell by -0.64%, the blue chips Dow Jones index was down -0.86%, and the tech-heavy Nasdaq retreated by -1.08%.

The biggest news post-hours was Donald Trump’s verdict as he became the first former US president to be found guilty of serious crimes.

The charges stem from falsifying business records to cover up hush money payments made to a porn star, and the jury reached their decision on all 34 charges after 9½ hours of deliberation.

To stocks, profit-taking continued to bring down shares in the energy and metal markets. However, a weaker US dollar helped lift the prices of precious metals.

But it was the tech stocks that experienced the most significant declines.

Dell’s stock dropped 5% during the trading session and an additional 15% after hours, even though the company met Wall Street’s earnings expectations for Q1 and reported higher-than-expected sales.

Nvidia saw its stock price drop almost -4% after US officials have reportedly delayed issuing licenses for exporting large-scale AI accelerators to the Middle East.

To economics data, the US GDP grew by 1.3% in the first quarter of the year, which is lower than the earlier estimate of 1.6%.

“Sum it all up and you have an economy that has come off the boil – and needed to – but remains on track for continued growth,” Jim Baird at Plante Moran Financial Advisors told Bloomberg.

Bond yields finally retreated on the back of the GDP report, and after Fed Bank of New York President John Williams expressed optimism that US inflation will keep decreasing in the second half of this year.

Can Trump still run for president?

Former President Donald Trump faced a seismic blow as a New York jury convicted him on all 34 counts, which centred around falsifying business records to influence the 2016 election.

Scheduled just before the GOP convention, his upcoming sentencing (which will be on July 11) added fuel to an already heated political landscape.

Trump defiantly vowed to challenge the verdict, while President Biden emphasised the importance of accountability.

While it’s common for a defendant convicted of a felony to face imprisonment, the US law doesn’t require it.

So despite the conviction, Trump’s potential return to presidential politics remained a looming possibility.

Trump can still run for office because the US Constitution imposes minimal eligibility criteria for the role, and it doesn’t say anything about a person’s character or criminal record.

In other markets …

Gold price rose by +0.25% to US$2,344 an ounce.

Oil prices retreated by a further -2%, with Brent crude now trading at US$81.82 a barrel.

The benchmark 10-year US Treasury yield finally stopped hiking. It was down 6 basis points (bond prices higher) to 4.55% on the weak GDP report.

The Aussie dollar rose by +0.3% to 66.34 cents.

The iron ore price dropped -2.5% to US$115.85 a tonne.

Bitcoin meanwhile rose by +1% in the last 24 hours to US$68,330, while Ethereum was down around -1% to US$3,745.

5 ASX small caps to watch today

AVITA Medical (ASX:AVH)
AVITA has received approval from the US FDA for its RECELL GO System. The device, designed by a commercial-stage regenerative medicine company, utilises a patient’s own skin cells to treat thermal burn wounds and full-thickness skin defects. Following this grant, the company will launch RECELL GO in its top burn treatment centres located in the US in June.

Eden Innovations (ASX:EDE)
Eden says anticipated sales revenue over next 4-6 months based on current tender quotations in pipeline are: USA ~$600k and India $300k. The main drivers of the increased interest in USA and India are not identical. In the US, oil and gas production is a major driver for the increased demand in OptiBlend. This is not the case in India. However, both USA and India also have similar demand for back-up power generation. OptiBlend allows conventional diesel engine to use natural gas as its primary fuel without modifying the engine or the diesel fuel system.

Voltaic Strategic Resources (ASX:VSR)
VSR say that recent rock chip sampling at the Eldinero prospect, part of its Meekatharra project, has shown visible signs of copper-gold minerals in quartz veins. This is a big step forward for the company’s exploration work, showing promise for more discoveries at the project. The minerals seem to be connected to the Burnakura Shear Zone, which stretches over 10km and is made up of dolerites. This zone is important because it holds several gold deposits.

Spacetalk (ASX:SPA)
Spacetalk has made a move back into the European market by teaming up with Elisa, a major mobile operator in Finland. This partnership means Spacetalk’s Adventurer 2 and Loop products will be sold in 67 Elisa stores and online starting in June. Elisa will have exclusive rights to sell Spacetalk products in Finland for 12 months. Initially, Elisa will stock 1600 Spacetalk devices, with an estimated annual sales of 5000 units.

Sparc Technologies (ASX:SPN)
Sparc will begin field trials with the South Australian Department for Infrastructure and Transport after providing its special coating for steel piles at the Streaky Bay Jetty project. These piles will be tested at three locations to observe their performance over six months. The coating process will start in June, and pile installation is planned for Q3.