ASX set to slip, Wall Street rebound runs out of puff; Nvidia releases results

It was the first earnings report for the company and its CEO, Jensen Huang, since a Chinese upstart, DeepSeek, upended the AI industry by saying it developed a large language model that can compete with big US rivals without having to use the most expensive chips. That called into question all the spending Wall Street 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.

Some Big Tech companies have since said they still plan to invest billions of dollars into AI, an encouraging signal for the industry.

NRG Energy jumped 10.6 per cent Wednesday after announcing its joining with GE Vernova and a subsidiary of Kiewit on a venture to generate more electricity for generative AI data centres. GE Vernova rose 5.5 per cent.

NRG also reported results for the latest quarter that topped analysts’ expectations. Most of the other companies in the S&P 500 have likewise been delivering better profits for the end of 2024 than analysts expected.

Off-price retailer TJX rose 1.8 per cent after joining the parade. The company behind TJ Maxx and Marshalls additionally said it plans to increase its dividend 13 per cent and announced a program to buy up to $US2.5 billion of its stock.

Worries have been rising about whether US shoppers may cut back on their spending given stubbornly high inflation and jitters about the economy’s prospects. But TJX CEO Ernie Herrman said his company has benefited from its off-price model and sees opportunities to grow over the long term.

General Motors revved up by 3.7 per cent after the automaker announced a program to buy back up to $US6 billion of its stock. It will also send more cash to its shareholders by increasing its dividend.

On the losing end of Wall Street, Advance Auto Parts tumbled 17.8 per cent after the retailer said it made less profit from each $US1 of revenue during the latest quarter than a year earlier, in part because of liquidation sales at stores it closed. Apple, meanwhile, was the heaviest weight on the S&P 500 after dropping 2.7 per cent.

All told, the S&P 500 inched up by 0.81 to 5,956.06. The Dow Jones Industrial Average fell 188.04 points to 43,433.12, and the Nasdaq composite climbed 48.88 to 19,075.26.

In the bond market, Treasury yields fell again after dropping sharply in recent days on worries about the US economy.

The yield on the 10-year Treasury sank to 4.24 per cent from 4.30 per cent. It had been nearing 4.80 per cent just last month.

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On Thursday, the US Commerce Department will issue its third and final estimate of how the US economy performed in the final three months of 2024. The economy still appears to be in solid shape, and growth is continuing, though uncertainty is rising about the future. Another report on Friday will show how the gauge of inflation that the Federal Reserve prefers to use has been behaving.

If reports were to show a stagnating economy and accelerating inflation, they could create a toxic mix that the Federal Reserve has few tools to fix.

“Stagflation is the biggest risk looming over markets right now,” according to from Mark Hackett, chief market strategist at Nationwide.

In stock markets abroad, indexes rose across much of Europe and Asia. France’s CAC 40 climbed 1.2 per cent, and Hong Kong’s Hang Seng jumped 3.3 per cent.

With AP

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