Australian shares to open lower as chip stocks drag Wall St
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The news: The Australian sharemarket is set to open lower after a chip-led sell-off dragged Wall Street lower overnight, as investors questioned whether massive artificial intelligence investments can justify lofty valuations, overshadowing generally upbeat US economic data.
The numbers: Updated at 7:55am AEST:
- ASX futures: down 15 points to 8,784 points
- Wall Street: Dow Jones down 0.20%, S&P 500 down 0.51%, Nasdaq down 1.47%
- Europe: FTSE 100 up 0.54%, CAC 40 down 0.05%, DAX down 0.34%
- Spot gold: down 2.07% to USD3,976 per ounce
- Oil prices: Brent down 0.16% to USD84.81/barrel, US WTI down 0.05% to USD79.58/bbl
- AUD: down 0.10% at 69.97 US cents
- Bitcoin: down 0.84% to USD64,179.
The context: All three major US indices closed lower on Thursday, led by a 4.3% decline in the Philadelphia Semiconductor Index as memory-chip makers came under pressure. SanDisk, Western Digital, Seagate Technology and Intel fell between 5.8% and 12.6%.
A stronger-than-expected outlook from Taiwan Semiconductor Manufacturing failed to lift sentiment after the company raised its 2026 capital expenditure forecast to USD60 billion ($85 billion)-USD64 billion, fuelling concerns over whether heavy AI investments will generate sufficient returns.
On the data front, US retail sales rose 0.2% in June as lower gasoline prices weighed on service station receipts, while motor vehicle purchases and online spending surged. Initial jobless claims fell to 208,000 last week, below Bloomberg estimates of 217,000, reinforcing expectations the Federal Reserve will leave interest rates unchanged later this month.
Locally, Telstra chief executive Vicki Brady and chief financial officer Michael Ackland are due to appear before a Senate inquiry into last week’s nationwide outage at 12:00pm AEST.
