US sharemarkets were mixed on Tuesday as investors digested weaker-than-expected retail sales data and assessed growing concerns about the impact of artificial intelligence on parts of the financial sector. The S&P 500 slipped 0.33% to close at 6,941.81, while the Nasdaq Composite fell 0.59% to 23,102.47. In contrast, the Dow Jones Industrial Average edged 0.10% higher, rising 52 points to a record close of 50,188.14, after setting its third consecutive intraday high earlier in the session.
Consumer data pressures retailers
Retail stocks came under pressure after December US retail sales were reported as flat, missing expectations for a modest monthly increase and slowing from November’s growth. Costco fell more than 2%, while Walmart declined over 1%, reflecting concerns about softer consumer momentum heading into the new year.
Focus shifts to jobs and inflation
Investors are now looking ahead to key economic data, including the US jobs report due midweek and inflation figures later in the week. Bond markets reacted swiftly to the weaker retail data, with the yield on the 10-year US Treasury falling six basis points to around 4.14%, increasing expectations that the Federal Reserve could begin cutting interest rates as early as June.
Financials retreat on AI disruption fears
Financial stocks also lagged after the launch of a new artificial intelligence-driven tax planning platform heightened concerns about competitive pressure in the sector. Shares of LPL Financial dropped sharply, while Charles Schwab and Morgan Stanley also ended lower. Despite the pullback, broader market conditions remain constructive, with the S&P 500 holding above key technical support levels after last week’s sell-off.
Australian sharemarket outlook
Australian shares are expected to open higher on Wednesday, with ASX 200 futures up 29 points, or 0.3%, pointing to an opening level of around 8,848. Gains may be tempered by weakness in healthcare stocks following late developments at CSL.
Commonwealth Bank delivers solid result
Commonwealth Bank reported a first-half cash profit of $5.4bn, supported by steady loan and deposit growth. The bank also announced plans to pay an interim dividend of $2.35 per share, keeping the major lenders firmly in focus as reporting season gathers pace.
Busy day ahead for markets
A heavy slate of company results is due on Wednesday, including earnings from AGL Energy, Arena REIT, Centuria Industrial REIT, Dexus Industria REIT, Evolution Mining, James Hardie Industries and several other listed groups. Attention will also turn to comments from the Reserve Bank, with deputy governor Andrew Hauser scheduled to speak in Sydney, while offshore markets await China’s latest inflation data and the delayed US nonfarm payrolls report.
