Market Highlights: Wall Street shatters records, but is Google set for historic break-up?

ASX set to rise as Wall Street hits record high
Alphabet set for historic break-up
Study shows investors trust human analysts over AI predictions

The ASX is poised to rise when the market resumes today as Wall Street hits a new all-time high. At 8am AEST, the SPI ASX200 futures contract was pointing up by 0.4%.

Overnight, the S&P500 rose by 0.71% to a fresh record high, the blue chips Dow Jones climbed by 1%, and the tech-heavy Nasdaq lifted by 0.6%.

Cyclical stocks, those that tend to rise and fall with the economic cycle, led the way.

This came after the release of the Fed Reserve minutes for the September meeting, which revealed that a “substantial majority” of officials supported the 50 basis points cut to initiate looser monetary policy.

“The bottom line is that Powell might have the market’s back headed into the year end,” said David Russell at TradeStation.

US investors have indeed been feeling pretty confident lately.

The Fed has begun cutting interest rates, and the job market’s looking solid. Plus, inflation appears to be easing, with analysts predicting that the US CPI for September, set to drop in tomorrow morning AEST, will land at 2.3% – the lowest we’ve seen since early 2021.

Financial bellwethers such as Visa, Mastercard, and JPMorgan Chase are also set to kick off earnings season on Friday – and they’re expected to provide the market with clear evidence the US economy is truly gaining momentum.

In stocks news, Alphabet fell by 1.5% last night after the US Department of Justice said it was contemplating a potential breakup of Google, a move that would make it the biggest antitrust action seen in decades. In a filing yesterday, the DoJ said it might force Google to share the core data used for its search and AI tools.

Tesla Inc fell 1.4% ahead of the RoboTaxi Event later tonight at Warner Bros Discovery’s movie studio in Burbank, California.

The event, dubbed “We, Robot”, will be showcasing Tesla’s new robotaxi and is seen as crucial for the company’s future. RBC analyst Tom Narayan said the robotaxi business could generate US$153 billion in revenue for Tesla.

Chips stocks mostly rose after Taiwan Semiconductor Manufacturing Co (TSMC) reported a stronger-than-expected 39% increase in quarterly revenue, easing worries that AI hardware spending may be slowing down.

Meanwhile, WW International shares rose by 38% after the company announced a new GLP-1 prescription weight-loss drug. In total, the stock has jumped more than 105% in the past five days.

Would you take financial advice from AI?

A recent study reveals that investors still prefer human expertise over AI for stock market predictions.

Researchers Dr. Gertjan Verdickt from the University of Auckland and Francesco Stradi from KU Leuven surveyed 3,600 US participants about their trust in S&P 500 stock predictions made by human analysts, AI systems, and a mix of both.

“We found that investors are more likely to believe human analysts first, followed by a combination of both human and AI. AI-generated predictions are viewed with the most scepticism,” said Verdickt.

This finding challenges the assumption that AI’s advanced data-crunching abilities would naturally earn investor trust.

Interestingly, the study also highlighted gender differences, with women more open to AI-driven advice than men.

“Men tend to be overconfident in their financial abilities, which may explain why they are more sceptical of AI,” Verdickt explains.

But investors with a better understanding of AI showed more trust in its predictions, and those identifying as Democrats were more likely to trust AI forecasts than Republicans.

Back to markets …

Gold price fell by 0.5% to US$2,607.70 an ounce.

Oil prices also fell by around 0.5%, with Brent crude now trading at US$76.70 a barrel.

The benchmark 10-year US Treasury yield climbed by 5 basis points (bond prices lower) to 4.06%.

The Aussie dollar was down 0.5% to US67.17 cents.

Bitcoin was down almost 3% in the last 24 hours to US$60,668, while Ethereum also slipped by 2% to US$2,370.

And iron ore traded flat at US105.15 a tonne.

5 ASX small caps to watch today

Power Minerals (ASX:PNN)
PNN and Heng Li Technology have completed due diligence for their joint venture to fund and develop the Pular Lithium Project. They plan to sign a formal agreement that allows Heng Li to fully fund and manage the project’s development, ensuring no dilution for Power’s shareholders. Heng Li also intends to buy 100% of the lithium concentrate produced at Pular. Its advanced extraction technology combines direct lithium extraction and evaporation, offering savings in cost, water, and energy. With this agreement, Power is set to advance its lithium production efforts in the Lithium Triangle of Argentina. Additionally, Heng Li will invest US$50,000 in Power through a share placement, with funds expected soon.

Artemis Resources (ASX:ARV)
Artemis said recent rock chip sampling at the Titan prospect has yielded impressive high-grade gold and newly discovered silver, with results including 553,754 g/t Au and 1,305 g/t Ag from one sample. The area shows strong potential, covering over 63 hectares and remaining open for further exploration. The company said the results suggest that the mineralisation is linked to quartz-iron veining, reinforcing the potential for more exploration in the region.

Lefroy Exploration (ASX:LEX)
Lefroy has been working on increasing the near-surface gold resources at its 100% owned Mt Martin Project. This has led to a total of 9.25 million tonnes at 1.47 g/t, amounting to 439,000 contained ounces, marking a 13% rise in near-surface ounces compared to previous estimates. The resource growth comes from incorporating 29 new drill holes in the Main Shear and East Shear areas, revealing several significant gold intersections. Multiple corridors have been identified for further growth, with mineralisation remaining open for exploration along strike and down plunge.

Archer Materials (ASX:AXE)
Archer has signed an agreement with MultiDimension Technology (MDT) to create tunnel magnetoresistance (TMR) sensors for commercial industrial applications. These sensors offer improved performance over traditional options, making them suitable for fields like artificial intelligence, data centres, automotive, and the internet of things. As part of Archer’s 12CQ project, it will finalise the TMR sensor design in the coming weeks, with prototypes expected by the end of the year. Early next year, Archer plans to optimise the design and engage potential customers, aiming to generate revenue while continuing its long-term quantum technology development.

Aurumin (ASX:AUN)
Aurumin has signed a binding term sheet with Newcam Minerals for an exclusive option to conduct due diligence and acquire a 50% interest in the iron ore rights at its Central Sandstone Project. This project is located 520km northeast of Perth and is part of Aurumin’s broader Sandstone Operations, which also include the Birrigrin and Johnson Range Projects.
Under the agreement, Newcam will pay $500,000 to Aurumin and cover 50% of exploration costs during the six-month option period. If Newcam exercises this option, it will pay an additional $500,000 for the 50% joint venture interest and provide a loan of up to $5 million for production start-up, to be repaid from operating profits.