Energy, tech stocks drive ASX higher

On Wall Street, the S&P 500 fell 0.5 per cent following the Fed’s widely-expected decision. The Dow Jones dipped 137 points, or 0.3 per cent, and the Nasdaq composite fell 0.5 per cent. However, a $US328 billion ($529 billion) exchange-traded fund tracking the tech-heavy index whipsawed after the close of regular trading. Tesla rebounded after an initial slide that followed its results. Microsoft dropped as growth in its cloud-computing business slowed during the last three months of 2024.
The reaction was also relatively muted in the bond market following the Fed’s decision, which could hint at rates staying on hold for a while following their swift drop at the end of 2024. Lower rates would help the economy by making it cheaper for US households and companies to borrow, but the downside is they could also give inflation more fuel.
Fed Chair Jerome Powell said after the decision that the central bank could cut rates if inflation were to slow further or if the job market suddenly weakened. But “right now, we don’t see that, and we see things as in a really good place for policy and for the economy, and so we feel like we don’t need to be in a hurry to make any adjustments.”
Wednesday’s relatively calm movements for financial markets offered some respite following two days of disruption driven by doubts about the artificial-intelligence boom.
A Chinese upstart, DeepSeek, has raised nearly existential questions for some of the AI industry after saying it developed a large-language model that can compete with the world’s best without having to use top-flight chips.
IT has caused huge swings for stocks across the industry, particularly for Nvidia.
The company, whose stock has almost become a symbol of the AI bonanza, fell 4 per cent on Wednesday after plunging nearly 17 per cent on Monday and then jumping nearly 9 per cent on Tuesday. It was the single heaviest weight dragging the S&P 500 lower, by far.
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Big gains for Nvidia and other Big Tech companies had been instrumental in the S&P 500’s rallying to back-to-back yearly gains of more than 20 per cent for the first time since before the millennium. Nvidia alone accounted for more than a fifth of all of the S&P 500’s total return last year.
Tesla’s shares lost 2.3 during the trading session, but then rebounded 3.1 per cent after the bell even though it said its fourth-quarter net income fell 71 per cent from a year ago when results were boosted by a one-time tax benefit.
Microsoft said growth in its cloud-computing business slowed during the last three months of 2024, a setback for a business that has bet billions on artificial intelligence products. Micvrosoft shares are 1.1 per cent lower in after-hours trade.
Meanwhile, Facebook and Instagram owner Meta Platforms posted sharply higher profit and revenue for its fourth quarter, thanks to higher ad revenue on its social media properties, sending its shares up 2 per cent in after-hours trading even as it forecast increasing expenses on its artificial intelligence efforts.
Trump Media & Technology Group rose after announcing it would be getting into the financial services business via a partnership with Charles Schwab. TMTG said more details would be released later this year, and what had been a double-digit gain for the notoriously volatile stock shrank to an increase of 6.8 per cent.
In other international markets, indexes were mixed in Europe. ASML’s stock jumped 5.6 per cent in Amsterdam after announcing strong revenue on demand for its advanced chipmaking tools.
With AP