Stan Choe
The US stock market is drifting around its all-time high on Wednesday, while the US dollar’s value stabilises against other currencies after falling to its lowest level in nearly four years.
The S&P 500 was mostly unchanged, coming off its latest record. The Dow Jones was up 58 points, or 0.1 per cent, and the Nasdaq composite rose 0.1 per cent. The Federal Reserve announces its rates decision at 6am AEDT. The widespread expectation is that it will hold its main interest rate steady but markets will be glued to what chief Jerome Powell has to say.
The Australian sharemarket is set for a flat start, with futures at 4.51am AEDT pointing to a dip of 5 points at the open. The ASX edged lower on Wednesday. The Australian dollar was trading at US69.87¢ at 5.11am AEDT.
Some Big Tech companies helped support Wall Street following an encouraging report from ASML. The Dutch company, whose machinery helps make chips, gave a forecast for 2026 revenue that topped analysts’ expectations.
ASML’s customers have been notably more encouraged about the medium term, CEO Christophe Fouquet said, mostly because of expectations for “the sustainability” of demand related to the artificial-intelligence boom. That helped allay some concerns that the AI frenzy has gone overboard and created a potential bubble that may burst.
Nvidia, the stock that’s become the poster child of the AI boom, climbed 1.4 per cent and was the strongest single force lifting the S&P 500. ASML’s stock that trades in the United States swung from an early gain to a drop of 2.9 per cent.
Stocks elsewhere in the market were mixed following the latest flurry of profit reports.
Seagate Technology jumped 19.3 per cent for one of the market’s biggest gains after the seller of hard drives and other data-storage products reported bigger profit and revenue than analysts expected. CEO Dave Mosley cited AI applications for its strong performance, among other things.
Starbucks climbed 2.1 per cent after its revenue for the latest quarter topped analysts’ expectations, thanks in part to a viral bear cup. That was even though its profit for the end of 2025 fell short of analysts’ targets.
Elevance Health rose 5.8 per cent after reporting a stronger profit than analysts expected. That helped it recover some of its stock’s 14.3 per cent sell-off from the prior day, when it and other health insurers got walloped by a proposed rate increase for Medicare Advantage by the US government that fell well short of what investors hoped.
But Amphenol’s stock tumbled 12.2 per cent even though the maker of fibre-optic connectors and other high-tech equipment reported stronger growth in profit and revenue for the end of 2025 than analysts had forecast. Expectations were high for the company after its stock came into the day with an already big surge of 23 per cent for the young year so far.
Companies across the market are under pressure to deliver solid growth in profits following the 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 stock prices have grown too expensive.
Apple slipped 1.2 per cent ahead of its profit report coming on Thursday, and it was one of the heaviest weights on the S&P 500.
In the foreign-currency market, the US dollar found some stability and was up against the British pound, Japanese yen and others. A day earlier, an index measuring the US dollar’s value against several of its peers dropped to its weakest level since early 2022.
The dollar’s value has been generally falling since President Donald Trump entered the White House last year, and its descent accelerated after Trump threatened tariffs earlier this month against several European countries that he said opposed his taking control of Greenland.
Such threats, along with worries about risks like the US government’s heavy debt, have periodically pushed global investors to step away from US markets, a move that’s come to be called “Sell America.”
In the bond market, Treasury yields ticked higher ahead of an announcement coming in the afternoon from the Federal Reserve on interest rates.
The Fed cut rates several times last year in hopes of shoring up the job market, but inflation remains stubbornly above its 2 per cent target. Lower interest rates could worsen inflation while giving the economy a boost.
Lower interest rates could also further undercut the US dollar’s value, which would help US exporters. Trump has been pushing aggressively for lower rates.
The yield on the 10-year Treasury rose to 4.26 per cent from 4.24 per cent late Tuesday.
As global investors have stepped away from the US dollar due to political instability and other worries, prices have surged for gold and other metals as investors searched for something safer to own. Gold’s price topped $US5000 per ounce this week for the first time, and it added another 4.1 per cent to $US5292.40.
In stock markets abroad, indexes sank in Europe following better performances in Asia.
South Korea’s Kospi rose 1.7 per cent to another record, thanks in part to a 5.1 per cent leap for chip company SK Hynix, while Hong Kong’s Hang Seng rallied 2.6 per cent.
AP
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