Australian shares to open lower as AI spending fears weigh on Wall Street
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The news: The Australian sharemarket is set to open lower after Wall Street ended mixed overnight, as easing oil prices were offset by mounting pressure on the biggest artificial intelligence spenders to justify their investments ahead of a busy week of earnings from major technology companies.
The numbers: Updated at 7:50am AEST:
- ASX futures: down 20 points to 8,821 points
- Wall Street: Dow Jones up 0.51%, S&P 500 up 0.02%, Nasdaq down 0.18%
- Europe: FTSE 100 up 0.02%, CAC 40 up 0.40%, DAX up 1.04%
- Spot gold: up 0.60% to USD4,076 per ounce
- Oil prices: Brent down 9.57% to USD88.01 a barrel, US WTI down 9.41% to USD81.95/bbl
- AUD: up 0.22% at 69.88 US cents
- Bitcoin: down 0.85% to USD64,775.
The context: The S&P 500 edged 0.02% higher, the Nasdaq slipped 0.18%, while the Dow rose 0.51%. The Philadelphia Semiconductor Index extended its recent sell-off, falling 2.2%. The index is now down 21% from its record closing high on 22 June, although it remains up 63% in 2026, according to Reuters.
Nvidia weighed on the Nasdaq, falling 5% after the WSJ reported that the company is in talks to provide a roughly USD250 billion ($357 billion) financing backstop for OpenAI as part of a major data centre project, fuelling investor concerns about circular financing in the artificial intelligence sector.
Semiconductor stocks are broadly weaker, with Advanced Micro Devices falling 8%. Oracle, which is developing several data centres for OpenAI, rose 4%, although its shares remain down 50% since June, according to WSJ.
Investors are now turning their attention to earnings from Microsoft, Amazon, Meta and Apple this week, as markets look for evidence that heavy investment in artificial intelligence is translating into sustainable earnings growth.
Elsewhere, oil prices tumbled more than 9% after the US paused its two-week bombing campaign against Iran, easing fears of a broader supply disruption. Brent crude fell to just below USD89 a barrel after briefly topping USD100 last week, as Washington held off striking Iran for a third consecutive day.
The US Federal Reserve is due to announce its latest policy decision on Wednesday (ET). Traders are pricing in a 62% chance the central bank will leave interest rates unchanged and a 38% chance of a 25-basis-point hike, according to the CME FedWatch tool.
