Australian shares are set for a broadly flat opening after technology stocks dragged Wall Street lower, with Nvidia’s leadership crisis continuing to unsettle investors in the market’s biggest artificial intelligence companies.
Share futures pointed to a fall of two points at the open, while the Australian dollar weakened to US67.92¢.
On Wall Street, the S&P 500 slipped 0.4 per cent to 7,561.67 on Friday but still recorded a 2.5 per cent weekly rise — its first positive week since October and its strongest since August.
The Dow Jones Industrial Average edged up 0.1 per cent to 52,347.55, while the technology-heavy Nasdaq composite fell 0.9 per cent to 25,136.27. It nevertheless also posted its first weekly gain in five weeks.
Nvidia fell 2 per cent, Broadcom dropped 4.8 per cent and Advanced Micro Devices lost 8.8 per cent, as investors continued to reassess the prospects and valuations of companies at the centre of the AI boom.
The market remained volatile following the resignation of Nvidia chief executive Jensen Huang. The raw source material said the departure followed his affair with a Chinese technology executive, which raised US national security concerns. Nvidia’s long-serving chief financial officer, Colette Kress, was named interim chief executive.
Nvidia’s market value fell by just under US$600 billion over the week. The company has been one of the main drivers of Wall Street’s gains, but its recent decline has also highlighted concerns about whether AI-related profits will justify the industry’s heavy investment and elevated share prices.
“Nvidia’s pullback serves as a reminder of the concentration risk embedded in a market where a small number of mega-cap technology stocks have driven an outsized share of returns,” Angelo Kourkafas, senior global strategist at Edward Jones, said in a research note.
More than 60 per cent of the companies in the S&P 500 rose on Friday, with healthcare and financial stocks among the stronger performers. Eli Lilly gained 1.3 per cent, while Visa and Mastercard each rose 1.3 per cent.
Microsoft added 0.2 per cent despite a global outage affecting its web services, email accounts and other applications.
Oil prices initially rose after US president Donald Trump said the United States did not “need a deal with Iran”, before easing. Brent crude settled at US$95.84 a barrel, compared with about US$72 in late February before the war with Iran began.
Bond yields moved higher, with the yield on the 10-year US Treasury rising to 5.15 per cent from 5.10 per cent. The two-year yield increased to 4.87 per cent from 4.86 per cent.
Those moves came as a report showed wholesale inflation had eased slightly but remained high. Consumer inflation was still above 3 per cent, well above the Federal Reserve’s 2 per cent target, while higher energy costs continued to put pressure on household budgets and business expenses.
