ASX bounces higher despite Wall Street slide

Wall Street futures slid after Donald Trump was convicted on all 34 counts in his hush money trial in New York. They were 0.6 per cent lower at 7.45am AEST.

Salesforce, which helps businesses manage their customers, lost nearly a fifth of its value after reporting weaker revenue for the latest quarter than analysts expected. The cloud-based software company also gave forecasts for revenue in the current quarter and fiscal year that fell short of Wall Street’s. Shares tumbled 19.7 per cent.

And Nvidia finally ran out of momentum after blowing past analysts’ expectations in its latest profit report, which fed more fuel into Wall Street’s frenzy around artificial-intelligence technology. Nvidia sank 3.8 per cent for its first drop since soaring more than 20 per cent following its profit report last week. The chip company was an even heavier weight on the S&P 500 than Salesforce.

Yields fell Thursday after a couple of reports showed the US economy isn’t quite as strong as expected. The hope on Wall Street is that the economy can cool down, but not by too much, so that the Federal Reserve can hit a precise landing where it gets high inflation under control without causing a bad recession.

One report showed more US workers applied for unemployment benefits last week than expected, though the number of layoffs still remains low compared with history. Another suggested the overall US economy’s growth may not have been quite as strong as earlier thought.

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A slowdown in the economy could give the Federal Reserve more confidence that inflation is sustainably heading down to its 2 per cent target. That in turn could convince it to cut the federal funds rate, which has been sitting at the highest level in more than two decades.

The more important data point will likely arrive Friday (US time), when the US government offers the latest monthly update on a gauge of inflation that the Federal Reserve prefers to use. That report “could dominate market sentiment until next Friday’s jobs report,” according to Chris Larkin, managing director, trading and investing, at E-Trade from Morgan Stanley.

With AP

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