Nasdaq rallies as investors dive back into tech: Aus shares to open higher

The Dow Jones Industrial Average rose on Tuesday for the first time in seven days as Wall Street readied for the end of the first half and investors piled back into tech stocks.

Overall, the 30-stock index climbed 212.03 points, or 0.63 per cent, to end at 33,926.74. The S&P 500 advanced 1.15 per cent to finish at 4,378.41, while the Nasdaq Composite surged 1.65 per cent to settle at 13,555.67.

Friday marks the end of the second quarter and first half of 2023. The Nasdaq has gained 10.9 per cent since the start of April and 29.5 per cent this year. It’s on pace for its best first half in 40 years as investors scoop up technology stocks after 2022′s slump. The S&P 500 and Dow are on track to finish the quarter up 6.6 per cent and about 2 per cent, respectively.

For June, the S&P 500 and Nasdaq are on pace to close nearly 5 per cent higher, while the Dow is poised for a monthly advance of 3.1 per cent.

Popular technology and artificial intelligence names such as Nvidia, Meta Platforms and Microsoft, rose on Tuesday, reversing Monday’s selloff and lifting the tech-heavy Nasdaq. Consumer discretionary and travel stocks also took flight as Delta Air Lines boosted its financial guidance. The airline stock surged 6.8 per cent.

Despite Tuesday’s broad market rally, Walgreens shed 9.3 per cent after slashing its full-year profit guidance and reporting weaker-than-expected earnings.

Elsewhere, Wall Street assessed a fresh batch of economic data that signalled resilience despite fears of an impending recession. May durable goods data unexpectedly increased, while consumer confidence improved more than expected in June. New home sales also topped expectations.

Global financial services powerhouse, UBS Group plans to cut over half of Credit Suisse's workforce, reducing total combined headcount by 30 per cent or 35,000 people, as part of the bank's emergency takeover, resulting in a dismal year for the financial sector job market worldwide.

As the second quarter concludes, there is growing discussion among investors regarding rebalancing flows, with JPMorgan estimating potential equity selling of up to $150B by balanced mutual funds, US defined benefit pension funds, and Norges Bank/GPIF/SNB, accompanied by significant bond buying, while approximately $50B worth of US equities could be put up for sale as part of the rebalance.

In commodity news, the fourth largest iron ore miner globally, Fortescue Metals Group, anticipates shipping its inaugural shipment from the Belinga Project in Gabon by the year's end, following a partnership agreement with the Gabonese government to commence mining operations and produce around 2.0 million tonnes annually, utilising existing infrastructure and the Owendo Mineral Port for transportation.

Overnight, all US sectors closed higher except for Health. Consumer Discretionary was the best performer.

And Investors speculate that Japanese authorities may initiate significant market intervention to support the yen due to a sharp depreciation, with Finance Minister expressing vigilance and willingness to respond if the drop becomes excessive.

Futures

The SPI futures are pointing to a 0.37 per cent rise.

Currency

One Australian dollar at 7:30 AM was buying 66.86 US cents.

Commodities

Gold has lost 0.52 per cent. Silver has gained 0.54 per cent. Copper has lost 0.42 per cent. Oil is down 2.41 per cent.

Figures around the globe

Across the Atlantic, European markets closed lower yesterday. London’s FTSE fell 2.17 per cent, Frankfurt lost 0.86 per cent, while Paris closed 1.42 per cent lower.

Turning to Asian markets, Tokyo’s Nikkei lost 0.49 per cent, Hong Kong’s Hang Seng gained 1.88 per cent and China’s Shanghai Composite closed 1.23 per cent higher.

Yesterday, the Australian sharemarket closed 0.56 per cent higher at 7,118.21.

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

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