Wall Street wobbles after Big Tech selloff. Picture Getty
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The ASX is set to open fairly steady when the market resumes on Tuesday. At 8am AEST, the SPI ASX200 futures contract was pointing down by just 0.05%.
Overnight, Wall Street tumbled as traders adjusted their expectations for a smaller rate cut from the Fed Reserve next month.
The S&P500 fell by 0.96% after notching a four-week winning run, the blue chips Dow Jones was down by 0.94%, and the tech heavy Nasdaq slipped by over 1%.
Wall Street’s go-to measure of market volatility, the VIX, soared by 18% to its highest level in two months.
The yield on the US 10-year note climbed 7 basis points to 4.03%.
Brent crude surged by 4% to above US$81 a barrel as tensions in the Middle East escalated.
A selloff in Big Tech companies pulled down stock indexes, fuelled by concerns that the Fed will choose a smaller rate cut next month after Friday’s blowout jobs report.
At the moment, there’s an 85% chance of a 25 basis point cut at the Fed’s November meeting, but the odds of no-cut has jumped to 15% from zero just a week ago.
“Friday’s strong jobs report not only appeared to kill any chance of a 50-basis-point rate cut in November, it kickstarted chatter about the Fed leaving rates unchanged if economic data continues to come in hotter than expected,” said Chris Larkin at E*Trade.
Stocks like Amazon, Meta, and Tesla fell between 2-3%, while Nvidia climbed by 2% as the lone gainer among ‘Mag 7’ stocks.
Alphabet sank 2% after a judge decided the company must remove restrictions that stop developers from creating competing marketplaces to its Google Play Store.
Apple also fell over 2% after Jefferies analyst Edison Lee downgraded the stock from Buy to Hold, citing concerns about overly optimistic expectations for the new AI-enabled iPhones.
“Near-term expectations for iPhone 16 and even 17 are too high,” Lee said in a note.
US insurance stocks dropped as Hurricane Milton intensified to a Category 5, posing a threat to the Gulf of Mexico and moving toward Florida.
And shares of Trump Media & Technology jumped about 11% after Elon Musk surprised attendees at a Trump rally in Butler, PA, on the weekend. During the rally, Trump mentioned he might offer Musk a cabinet position.
After more than three years of seeking answers, US investors have finally gotten clarity on inflation, interest rates, and the economy.
Inflation isn’t just declining; it has already declined. Interest rates aren’t just about to be cut; they have already been cut.
And Friday’s jobs report was neither too hot nor too cold, but instead, echoing Goldilocks, “just right.”
Olivier d’Assier at SimCorp said this should give investors a “Viking” sense of entitlement to whatever risky assets they can plunder.
“Coupled with the start of the Q3 earnings season, this should encourage them to diversify their investments across more segments of the economy (not just AI), thereby increasing market breadth and depth over the next few weeks,” said d’Assier.
“Look for small-cap growth stocks to start making a comeback.
“The only remaining uncertainty affecting sentiment is the outcome of the upcoming US elections (both White House and Congress).
“Barring any transfer of power mired in political violence in the US after next month’s elections, Q4 should see positive performance across major developed markets,” he wrote.
Geopolitics will remain a negative factor for the time being, however, but generally speaking, it does not affect the long-term direction of equity markets.
“Instead, geopolitical risk tends to influence asset allocation decisions—how much of my assets should I allocate to risky versus safe investments?” wrote d’Assier.
Gold price fell by 0.4% to US$2,642 an ounce.
Oil prices rose by 4%, with Brent crude now trading at US$81.01 a barrel.
The benchmark 10-year US Treasury yield climbed a further 7 basis points (bond prices lower) to 4.03% after Friday’s blowout US jobs report.
The Aussie dollar was down 0.5% to US67.61 cents.
Bitcoin was up by 1% in the last 24 hours at US$63,323, while Ethereum also lifted by 1% to US$2,455.
And iron ore lifted 3% to US111.75 a tonne.
Black Canyon (ASX:BCA)
BCA has announced promising results from its W2 prospect in Wandanya, located 80 km south of the Woodie Woodie Manganese Mine. Significant assays include 5m at 33.2% Mn and notable higher-grade intervals of up to 48.7% Mn. The mineralisation shows impressive thickness and grade consistency over 240m and remains open for further exploration. The W2 area is thought to represent a new model for hydrothermal manganese enrichment in the Oakover Basin. Plans for metallurgical testing aim to produce a high-grade manganese concentrate.
Brookside Energy (ASX:BRK)
Brookside has reported strong early results from four new wells at its SWISH Project in Oklahoma, producing around 80,000 barrels of oil equivalent (87% liquids) and generating approximately US$4.3 million in revenue during initial flowback. Daily production has reached about 3900 barrels of oil equivalent, with only 6% of the stimulation fluid recovered so far. The wells, particularly the three Sanford Pad wells, are yielding significant volumes despite being primarily in the slower-clearing Woodford Shale. Early production from the Rocket Well in the Sycamore formation is also encouraging.
Wildcat Resources (ASX:WC8)
Wildcat has announced impressive lithium results from its Tabba Tabba Project in Western Australia. At Leia, drilling revealed 84m at 1.4% Li2O and 89.8m at 1.2% Li2O, with significant high-grade intervals included. At Luke, new intercepts show 61m at 1.1% Li2O, while near-surface mineralisation at Chewy and Hutt includes 50m at 1.1% Li2O and 36.2m at 1.6% Li2O. The company has $77.2 million in cash as of June 30 to support the ongoing project.
Butn (ASX:BTN)
Butn has launched a Retail Private Credit Fund, targeting fixed returns of around 9.5% per annum for investors. Since its inception, Butn has originated over $2 billion in funding with consistent double-digit annual returns. The Fund will finance various asset-backed lending opportunities, including invoice and trade finance, and will be operated by a wholly owned subsidiary. Investments will be locked in for a minimum of one year, and current Butn shareholders will receive bonus interest with each distribution.
Kincora Copper (ASX:KCC)
Kincora is launching three partner-funded drilling programs, targeting approximately 11,000 metres across thirteen copper-gold porphyry projects by year-end. Drilling has begun at the Nyngan Project with AngloGold Ashanti, exploring up to eight large targets for the first time, with plans for 6 to 8 drill holes totalling 4000-5000 metres. Kincora will manage this program and earn a 10% management fee. At the Cundumbul Project, Earth AI is starting a second phase with five drill holes planned for 3000 metres, while Kincora retains full project ownership. Additionally, drilling is underway at the Bronze Fox Project in Mongolia, aiming for shallower high-grade zones, with about 2250-3250 metres planned before winter. Kincora remains a key shareholder in this project.
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