AI Gloom Abates

AI-related stocks led Wall Street higher on Monday as renewed confidence in AI demand drove a rebound in chipmakers. Outside the technology sector, markets were more subdued, with Europe weaker and Asia delivering mixed results. Closer to home, the NZX 50 notched a record closing high.

AI demand lifts Wall Street

US shares advanced on Monday as pressure on technology stocks eased and chipmakers rebounded on renewed confidence in AI demand. The DOW rose +0.2%—briefly trading above the 53,000 mark—while the S&P 500 gained +0.9% and the NASDAQ climbed +1.3%. Nvidia (+0.9%) supplier Hon Hai Precision Industry (+0.6%) reported stronger-than-expected quarterly sales, while AMD surged +8.0% after a major broker reiterated its buy rating and raised its price target. Dell gained +3.4% after President Trump promoted Dell computers while ringing the opening bell, telling investors to ‘go out and buy a Dell computer’. Dell CEO Michael Dell has pledged to donate more than US$6 billion to the ‘Trump Accounts’ programme that Trump was promoting. Micron rose +2.2% after signing a long-term supply agreement with Ford (+3.5%), while oil prices were little changed after OPEC+ agreed to raise output targets. O'Reilly Automotive fell -6.8% after reports it is making a cash bid for Genuine Parts’ (-2.7%) auto-parts business. The US two-year yield fell -1bp to 4.13%, while the 10-year yield was unchanged at 4.48%.

Europe and London down despite mixed economic data

Europe’s STOXX 600 slipped -0.3% on Monday after touching a fresh intraday high, while London’s FTSE 100 fell -0.3% as early gains faded. In economic data, German factory orders rose +1.9%, while UK financial services activity weakened sharply in the second quarter and construction remained in contraction, offsetting stronger car registrations. easyJet surged +9.3% after accepting a sweetened £5.5 billion offer from Castlelake, while ASML dipped -0.4% and BE Semiconductor Industries fell -5.5% amid weakness in the chip sector, lacking the strong lead from the US.

Asia mixed, Australia falls on lack of guidance from Wall Street

Australia’s ASX 200 slipped -0.2% on Monday, with regional markets subdued after Wall Street was closed on Friday for the Independence Day holiday. Energy stocks outperformed following broker upgrades, with Woodside Energy (+0.8%), Santos (+1.4%), and Beach Energy (+0.6%) all higher. Among miners, Northern Star fell -1.8% and BHP lost -0.8%, while Fortescue rose +0.8% and Rio Tinto was unchanged. In M&A, Vault Minerals surged +11.6% after Genesis Minerals entered the takeover contest with a cash-and-scrip bid valuing Vault Minerals at $5.08 per share, while Genesis Minerals fell -4.1% and rival bidder Regis Resources rose +1.1%. Asia was mixed, with Japan’s Nikkei 225 and China’s CSI 300 unchanged. Hong Kong’s Hang Seng rose +1.1%, while China’s Shanghai Composite fell -0.1%. Korea’s Kospi lost -0.5%. Closer to home, the NZX 50 added +1.1% to a record closing high, led by Infratil (+2.0%), a2 Milk (+2.7%), and EBOS (+2.7%), with Infratil announcing positive developments relating to its largest investment, CDC.

WTI Crude and Iron Ore flat, Gold down

WTI Crude remained flat at US$68.56/bbl, Iron Ore remains flat at US$98.25/MT, while Gold fell -0.3% to US$4,161.97/oz.