ASX set for sluggish start after Wall Street rally loses momentum

Much is riding on expectations that the AI investment boom will pay off by making the global economy more productive and driving more growth. Without that increased efficiency, inflation could push higher due to upward pressure coming from the mountains of debt that the US and other governments worldwide are building.

That has optimists on Wall Street buying tech stocks and pessimists buying gold, according to Thierry Wizman, a strategist at Macquarie Group.

Investors have traditionally seen gold as offering protection from high inflation. Its price has soared more than 50 per cent this year not only because of governments’ huge debt loads but also because of political instability worldwide and expectations for lower interest rates from the Fed.

Investors looking to “hedge” themselves, meanwhile, may be buying both tech stocks and gold, Wizman wrote in a research report.

Spot gold inched above $US3,991 an ounce to a fresh record high on Tuesday while December futures in New York, the most active contract, surpassed $US4,000 for the first time.

Elsewhere on Wall Street, Intercontinental Exchange, the company behind the New York Stock Exchange, added 2 per cent after saying it had agreed to invest up to $US2 billion in Polymarket.

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Polymarket offers prediction markets that allow customers to profit from making predictions on events across politics, financial markets and popular culture, such as who will become New York City’s next mayor or whether the US government will announce this year that aliens exist.

In Toronto, shares of Trilogy Metals more than tripled after the White House said late Monday that it’s taking a 10 per cent equity stake in the Canadian company while allowing the Ambler Road mining project in Alaska to go forward.

President Donald Trump late on Monday ordered the approval of a proposed 340-kilometre road through an Alaska wilderness to allow mining of copper, cobalt, gold and other minerals used in production of cars, electronics and other technologies. Trilogy is seeking to develop the Ambler site along with Australia’s South 32, and its shares soared 250.9 per cent.

In Europe, France’s CAC 40 edged up by less than 0.1 per cent a day after slumping due to the latest political upheaval in Paris. France’s prime minister abruptly resigned on Monday.

In the bond market, the yield on the 10-year Treasury eased to 4.12 per cent from 4.18 per cent late on Monday.

AP, with staff writers

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