ASX set to slide, Wall Street mixed; Tesla falls, Alphabet surges
The S&P 500 was 0.3 per cent higher in afternoon trading, coming off its all-time high set the day before. The Dow Jones was down 174 points, or 0.4 per cent, and the Nasdaq composite was 0.4 per cent higher. The Australian sharemarket is set to retreat, with futures at pointing to a fall of 33 points, or 0.4 per cent, at the open. The ASX lost 0.8 per cent on Thursday.
Alphabet climbed 1.9 per cent after the company behind Google and YouTube delivered a fatter profit for the latest quarter than analysts expected. It's leaning more into artificial-intelligence technology and said it's increasing its budget to spend on AI chips and other investments this year by $US10 billion ($15.2 bilion) to $US85 billion.
That helped push up other stocks in the AI industry, including a 1.1 per cent rise for Nvidia. The chip company was one of the strongest forces lifting the S&P 500 because it's the largest on Wall Street in terms of value.
But an 8.8 per cent drop for Tesla kept the market in check. Elon Musk's electric-vehicle company reported results for the spring that were roughly in line with or above analysts' expectations, and Musk is trying to highlight Tesla's moves into AI and robotaxis.
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The focus, though, remains on how Musk's foray into politics is turning off potential customers, and he said several rough quarters may be ahead as 'we're in this weird transition period where we'll lose a lot of incentives in the US'
Stocks have broadly been rallying for weeks on hopes that President Donald Trump will reach trade deals with other countries that will lower his stiff proposed tariffs, along with the risk that they could cause a recession and drive up inflation. The record-setting gains have been so strong that criticism is rising about how expensive stock prices have become. That in turn puts pressure on companies to deliver solid growth in profits in order to justify their gains.
Chipotle Mexican Grill also helped weigh on the market despite delivering a profit for the spring that topped analysts' expectations. The restaurant chain's growth in revenue came up short of expectations, and its stock fell 13.8 per cent.
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