Australian investors are likely to approach Friday’s session cautiously after US equity futures moved lower following another technology-led decline on Wall Street. Concerns surrounding stretched artificial-intelligence valuations, rising investment expenditure and the interest-rate outlook continued to weigh on market sentiment.
S&P 500 futures declined 0.5%, while Nasdaq 100 futures fell 0.9%. Dow Jones futures were also down 0.5%. The weakness followed a negative US session in which the Nasdaq Composite lost 1.5%, the S&P 500 declined 0.5% and the Dow Jones Industrial Average slipped 0.2%.
S&P 500 Index (Source: TradingView)
Netflix shares dropped sharply in after-hours trading after its September-quarter revenue and earnings guidance fell short of market expectations. The softer outlook overshadowed a solid second-quarter performance, with revenue rising approximately 13% year-on-year. Investors appeared concerned about slowing growth, increasing competition and the company’s ability to maintain momentum following recent subscription-price increases.
Semiconductor companies were another major source of weakness. Dow Jones U.S. Semiconductors Index fell 3.80%, while Intel and Nvidia declined 5.84% and 2.4%, respectively. Taiwan Semiconductor Manufacturing Company (TSMC) also finished lower despite delivering strong quarterly earnings and upgrading its revenue outlook.
Dow Jones U.S. Semiconductors Index (DJUSSC) (Source: TradingView)
TSMC’s plans to lift annual capital expenditure to between US$60 billion and US$64 billion raised fresh questions about whether returns from the global AI investment cycle will justify rapidly increasing spending. Its results nevertheless demonstrated that underlying demand for advanced chips remains strong.
For the Australian market, the US sell-off may create a cautious backdrop for ASX-listed technology companies and businesses exposed to global semiconductor and AI investment. Interest-rate-sensitive sectors could also face pressure after Dallas Federal Reserve President Lorie Logan reportedly supported modestly higher rates to manage inflation risks.
Meanwhile, heightened US–Iran tensions and disruption risks surrounding the Strait of Hormuz remain important for Australian investors. Higher oil prices could support ASX energy producers but may also increase inflation concerns, complicating the outlook for interest rates and consumer-facing businesses.
Attention will now shift to upcoming results from Alphabet, Amazon, Microsoft and Meta. Their earnings and investment guidance may determine whether confidence in the AI-led technology rally stabilises or whether volatility extends into Australian and global equity markets.
Disclaimer: Ace Investors Pty Ltd (ABN 70 637 702 188) authorized representative of MF & CO. ASSET MANAGEMENT PTY LTD (AFSL No.520442). Ace Investors has made all efforts to warrant the reliability and accuracy of the views and recommendations articulated in the reports published on its websites. Ace Investors research is based on the information known to us or which was obtained from various sources which we believed to be reliable and accurate to the best of its knowledge. Ace Investors provides only general financial information through its website, reports and newsletters without considering financial needs or investment objectives of any individual user. We strongly advocate that you seek advice, with your financial planner, advisor or stock broker, the merit of each recommendation before acting on any recommendation for their own specific financial circumstances and realize that not all investments will be suitable for all subscribers. To the scope permitted by law, Ace Investors Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Ace Investors Pty Ltd hereby limits its liability, to the scope permitted by law to resupply of the services. The securities and financial products we study and share information on, in our reports, may have a product disclosure statement or other offer document associated with them. You should obtain a copy of these before making any decision about acquiring any security or product. You can refer to our Financial Services Guide.