ASX set to slide, Apple rally leads Wall Street higher; $A stronger

Wall Street is rising on Wednesday, led by a rally for Apple.

The S&P 500 was 0.7 per cent higher in afternoon trading. The Dow Jones Industrial Average was up 145 points, or 0.3 per cent, in mid-afternoon trade, and the Nasdaq composite was 1.1 per cent higher.

A surge by Apple has boosted Wall Street on Wednesday.Credit: Bloomberg

Apple alone accounted for nearly half of the S&P 500’s gain. It rose 5.7 per cent ahead of an announcement at the White House where it was announced the tech giant will increase its US investments by an additional $US100 billion ($153.7 billion) over the next four years.

The Australian sharemarket is set to retreat, with futures at 4.55am AEST pointing to a fall of 27 points, or 0.3 per cent, at the open. The ASX gained 0.8 per cent on Wednesday. The Australian dollar gained. It was 0.5 per cent higher at US65.05¢ at 5.14am.

Trading elsewhere on Wall Street was mixed following a jumble of profit reports. McDonald’s and Shopify rose following their latest updates, while Super Micro Computer tumbled after its earnings and revenue came in below analysts’ expectations. Disney fell after its earnings beat forecasts but its revenue fell short.

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Worries are still high that President Donald Trump’s tariffs may be hurting the economy, but hopes for coming cuts to interest rates by the Federal Reserve and a parade of stronger-than-expected profit reports from US companies have helped steady the market.

Companies are under pressure to deliver bigger profits to justify the big gains their stock prices have made since the US market hit a low point in April. The S&P 500 is just a bit below its record, which was set late last month, and the big rally fuelled criticism that the broad market has become too expensive.

McDonald’s climbed 3.4 per cent after reporting stronger profit and revenue for the spring than analysts expected. A meal tied to the Minecraft movie proved to be a hit for the restaurant chain.

Shopify jumped 19.7 per cent after the company, which helps businesses sell on the internet, said it made more in revenue last quarter than expected. Analysts also said the company’s forecast for revenue in the current quarter suggests the strong trends are continuing.

Arista Networks was one of the stronger forces lifting the S&P 500 and leaped 18 per cent after the networking company delivered a bigger profit for the latest quarter than expected. Its forecast for revenue in the current quarter also topped forecasts.

They helped offset a 19.3 per cent slump for Super Micro Computer, which gave back some of the huge gains the server maker has made recently. Super Micro came into the day with a nearly 88 per cent gain for its stock so far this year, but it reported weaker profit and revenue for the latest quarter than analysts expected. It also gave a forecast for profit in the current quarter that fell short of what Wall Street had penciled in.

Disney dropped 2.4 per cent after its profit beat forecasts but its revenue fell short. Analysts said investors may have been looking for Disney to boost its profit forecast by a bigger amount.

The NFL also announced that it had entered into a nonbinding agreement with Disney’s ESPN, which will give the sports broadcaster the NFL Network, NFL Fantasy and the rights to distribute the RedZone channel. The NFL will get a 10 per cent stake in ESPN in the proposed deal.

Chip company Advanced Micro Devices fell 6 per cent after its profit for the latest quarter only matched analysts’ expectations. Analysts said the company’s financial forecasts for upcoming results also looked solid, but that may not have been enough for investors after its stock had already soared 44.3 per cent for the year so far coming into the day.

In the bond market, Treasury yields held relatively steady.

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The yield on the 10-year Treasury edged up to 4.24 per cent from 4.22 per cent late Tuesday. It’s still well below where it was last week, before Friday’s much weaker-than-expected report on the US job market ignited worries that Trump’s tariffs are pushing employers to hold back on hiring.

That report has traders on Wall Street betting heavily that the Federal Reserve will need to cut interest rates at its next meeting in September. Such cuts can give the economy and investments prices a boost, but they also can push inflation higher.

In stock markets abroad, indexes rose modestly across much of Europe and Asia.

AP

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