ASX set to fall, Wall Street drifts lower; Apple makes $US500b play

Chief among them is Nvidia, the company that’s become one of Wall Street’s most influential stocks because of what had been nearly insatiable demand for its chips. Wednesday will be the company’s first profit report since a Chinese upstart, DeepSeek, upended the artificial-intelligence industry by saying it developed a large language model that can compete with big US rivals without having to use the top-flight, most expensive chips.

That called into question all the spending Wall Street had assumed would go into not only Nvidia’s chips but also the ecosystem that’s built around the AI boom, including electricity to power large data centres.

Nvidia’s stock bounced between gains and losses through Monday, helping to pull the S&P 500 and other indexes up and down in its wake. It ended up falling 3.1 per cent and was the heaviest single weight on the S&P 500. Because of its massive size, Nvidia is the second-most influential stock on the S&P 500 after only Apple, and it alone accounted for more than a fifth of the index’s total return last year.

“There is very little room for Nvidia to disappoint analyst profit expectations this year, given its assumed leadership position in AI, already elevated valuations, and new developments and entrants in the space that could threaten its dominance over time,” according to Anthony Saglimbene, chief market strategist at Ameriprise.

Apple shares rose by 0.6 per cent as it sought relief from US President Donald Trump’s tariffs on goods imported from China, saying that it will hire 20,000 new workers and produce AI servers in the US.

The company said Monday that it plans to spend $US500 billion domestically over the next four years, which will include work on a new server manufacturing facility in Houston, a supplier academy in Michigan and additional spending with its existing suppliers in the country. The disclosure comes days after Trump and Apple Chief Executive Officer Tim Cook met in the Oval Office.

Other big profit reports due this week include Home Depot’s on Tuesday and Salesforce’s on Wednesday.

All told, the S&P 500 fell 29.88 points to 5,983.25. The Dow Jones Industrial Average added 33.19 to 43,461.21, and the Nasdaq composite fell 237.08 to 19,286.92.

This upcoming week will also feature updates on consumer confidence and inflation, topics that are at the top of Wall Street’s agenda following last week’s slump.

Recent reports have shown that consumer sentiment is souring as expectations for inflation worsen, in part because of tariffs and other policies pushed by President Donald Trump.

Stubbornly high inflation could prevent the Federal Reserve from delivering more relief for the economy and financial markets through lower interest rates.

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The Fed has been holding its main interest rate steady after sharply cutting it through the end of last year. At their last policy meeting in January, Fed officials suggested they may stay on hold for a while given worries about how Trump’s proposed tariffs and mass deportations of migrants, along with other factors, could push upward on inflation.

While lower rates can boost the economy, they can also encourage spending that puts upward pressure on inflation.

In the bond market, Treasury yields eased ahead of the upcoming reports. The yield on the 10-year Treasury slipped to 4.40 per cent from 4.43 per cent late Friday.

In stock markets abroad, German stocks ticked higher, and the DAX advanced 0.6 per cent after political conservatives won an election dominated by concerns about Europe’s largest economy.

Indexes dipped across much of the rest of Europe and Asia. France’s CAC 40 fell 0.8 per cent, Hong Kong’s Hang Seng slipped 0.6 per cent and Japan’s market was closed for a holiday.

AP

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