Stan Choe
Updated ,first published
A day of dramatic swings on Wall Street, including Microsoft’s worst drop in years and a sudden reversal for the price of gold, finished with only relatively modest moves on Thursday.
The S&P 500 slipped 0.1 per cent after flirting with its record high in the morning and dropping by as much as 1.5 per cent later in the day. The Dow Jones rose 55 points, or 0.1 per cent, after erasing an earlier loss of more than 400 points, and the Nasdaq composite fell 0.7 per cent.
The Australian sharemarket is set to advance, with futures pointing to a rise of 33 points, or 0.4 per cent, at the open. The ASX edged lower on Thursday. The Australian dollar was trading at US70.24¢ at 5.20am AEDT.
Microsoft was the heaviest weight on Wall Street by far, and the tech giant tumbled 10 per cent, wiping around $US357 billion ($506 billion) off its market cap, even though it reported stronger profit and revenue for the latest quarter than analysts expected. Investors honed in instead on how much Microsoft is spending on investments, whether growth in its Azure cloud business will slow and how long its push into artificial-intelligence technology will take to turn into big profits.
The only bigger one-day valuation destruction was Nvidia’s $US593 billion rout last year after the launch of DeepSeek’s low-cost AI model. Microsoft’s move is larger than the market capitalisations of more than 90 per cent of S&P 500 Index members, according to data compiled by Bloomberg.
It was the stock’s worst day since the market’s COVID crash in 2020.
Apple’s iPhone sales soared to a new quarterly record during the holiday season, despite artificial intelligence blunders that prompted the technology trendsetter to get a helping hand from Google.
The October-December results announced Thursday reflect the allegiance of Apple’s fans, who eagerly snapped up the latest iPhone 17 models even though the company still hasn’t delivered on its 2024 promise to smarten up the device’s Siri assistance with AI.
The company reported iPhone sales of $US85.3 billion, a 23 per cent increase from the same time in the previous year. It marked Apple’s highest iPhone sales for a three-month period since the device’s debut in 2007. Shares are up 1 per cent in after-hours trading.
Tesla weighed on the market after falling 3.5 per cent. It delivered a bigger profit for the latest quarter than analysts expected, but the results were sharply lower than from a year earlier. Tesla’s leader, Elon Musk, has been trying to get investors to focus less on its flagging car sales and more on the company’s robotaxis and robots.
Companies across the market are under pressure to deliver at least solid growth in profits following record-setting runs for their stock prices. Stock prices tend to follow the path of corporate profits over the long term, and earnings need to rise to quiet criticism that stocks have grown too expensive.
Still, more stocks rose within the S&P 500 than fell. Leading them was Meta Platforms, which rallied 10.4 per cent after the company behind Facebook, Instagram and WhatsApp topped profit expectations, even though it also said it will continue its massive investments in AI.
IBM was another winner and climbed 5.1 per cent after surpassing analysts’ expectations for profit and revenue. Southwest Airlines flew 18.7 per cent higher even though its profit fell short of forecasts. It gave a forecast for earnings in 2026 that blew past analysts’ expectations, saying it’s seeing strong momentum after making changes like charging baggage fees and having assigned seating.
Some of the wildest action in financial markets was again for precious metals.
Gold’s price rallied near $US5600 per ounce in the morning before suddenly and briefly dropping back below $US5200. It then steadied somewhat and rose modestly to another record.
It was only on Monday that gold’s price topped $US5000 for the first time, and it had nearly doubled over the last 12 months.
Silver, which has been zooming higher in its own feverish run, had a similar and sudden reversal of momentum before ticking higher again.
Prices for precious metals have been surging as investors look for safer things to own while weighing a wide range of risks, including a US stock market that critics call expensive, political instability, threats of tariffs and heavy debt loads for governments worldwide.
But safety can come at a price when it’s expensive. The huge runs for gold and silver raised criticism that their prices had gone too far, too fast and were due for a pullback. Bitcoin, which is pitched as a form of “digital gold,” also fell sharply. It sank nearly 6 per cent and dropped toward $84,000.
The US dollar has seen its value sink over the last year because of many of the same risks that drove gold’s price higher, but the dollar held relatively steady against the British pound and euro Thursday.
Oil prices rose roughly 3.5 per cent on worries about potentially rising tensions between the United States and Iran, which could ultimately constrict the flow of crude. Defense Secretary Pete Hegseth warned the US military “will be prepared to deliver whatever the president expects,” just a day after President Donald Trump told Iran to “make a deal” on its nuclear program.
In the bond market, the yield on the 10-year Treasury dipped to 4.23 per cent from 4.26 per cent late Wednesday.
In stock markets abroad, indexes rose across much of the rest of the world.
South Korea’s Kospi climbed 1 per cent for one of the world’s bigger moves, lifted to another record in part by chipmaker SK Hynix.
AP
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