US sharemarkets finished mixed on Thursday as investors balanced renewed inflation concerns against strong corporate earnings and resilient economic data.
The Dow Jones Industrial Average surged 1.7% to a fresh record high, supported by gains in UnitedHealth, Goldman Sachs and Merck. The S&P 500 rose 0.4%, while the Nasdaq Composite slipped 0.1% as weakness in technology stocks offset broader market gains.
The mixed performance followed Wednesday’s sell-off, when the S&P 500 snapped a nine-session winning streak amid concerns that the Iran war could keep inflation elevated and delay interest rate cuts.
Technology stocks remained under pressure. Broadcom fell 12.6% despite reporting strong quarterly results after investors judged its outlook insufficiently optimistic given elevated expectations. Earlier weakness across artificial intelligence-related stocks also weighed on sentiment, with Nvidia, Dell Technologies, Oracle and Microsoft all retreating.
Investor attention remained focused on the inflation outlook after stronger-than-expected economic data reinforced expectations that US interest rates could remain higher for longer.
ADP employment data and resilient services sector activity suggested the US economy continues to expand despite higher borrowing costs, reducing expectations for near-term monetary easing.
Oil prices remained elevated after renewed military activity involving the United States and Iran earlier in the week heightened concerns about energy supplies and inflation. Brent crude eased 2.8% to US$95.09 a barrel, while US West Texas Intermediate crude settled lower after recent gains. Despite Thursday’s decline, both benchmarks remain well above levels seen before the latest escalation in the Iran war.
The conflict intensified after the United States and Iran exchanged strikes, including US military action on Qeshm Island and the interception of Iranian missiles and drones targeting American interests in the region.
Bond yields remained elevated as investors continued weighing the inflationary impact of higher energy prices. The US 10-year Treasury yield stood at 4.47%, while Australia’s 10-year government bond yield traded at 4.91%.
Gold was little changed at US$4,475 an ounce, while Bitcoin fell 2.8% to US$63,623.
Australian Market Outlook
Australian shares are expected to finish the week higher, supported by gains on Wall Street and strength across financial and healthcare stocks. S&P/ASX 200 futures are up 48 points, or 0.6%, to 8,739. Financial stocks may receive support from the strong performance of major US banks overnight, while healthcare names could benefit from gains across the sector in New York.
Technology stocks are likely to remain in focus after Broadcom’s sharp decline despite reporting strong earnings, highlighting investor sensitivity to valuations across the artificial intelligence sector.
Commodity markets may also influence local sentiment after iron ore fell 2% to US$101.60 a tonne, while oil prices remained elevated despite easing overnight.
Investors will continue monitoring developments in the Iran war, global inflation trends and the outlook for interest rates as markets assess whether recent economic resilience will keep central banks cautious about easing monetary policy.
