US sharemarkets fell sharply as investors rotated out of technology stocks and into sectors more closely tied to broader economic activity. The S&P 500 declined 0.84 per cent to close at 6,917.81, while the Dow Jones Industrial Average slipped 0.34 per cent to 49,240.99, after briefly touching a fresh intraday record earlier in the session. The Nasdaq Composite bore the brunt of the selling, falling 1.43 per cent to 23,255.19.
The pullback reflected growing unease around high-growth technology names, particularly software and artificial intelligence-linked stocks, as investors reassessed valuations and earnings momentum.
Technology stocks under pressure
Losses were widespread across the technology sector. Several large-cap names traded lower, including Microsoft and Meta Platforms, both down more than 2 per cent. Apple ended marginally weaker, while Nvidia fell nearly 3 per cent, adding to its losses for the year. Software stocks remained under heavy pressure, with ServiceNow and Salesforce each sliding close to 7 per cent.
Palantir was a notable exception early in the session, rising strongly after reporting better-than-expected quarterly results and issuing upbeat guidance. However, much of those gains faded as broader selling pressure intensified across the sector.
Rotation beyond equities
Weakness was not confined to sharemarkets. Bitcoin fell to its lowest level since November 2024, extending losses after dropping below the US$80,000 mark over the weekend. The move highlighted a broader shift away from speculative assets as investors reduced risk exposure.
By contrast, precious metals rebounded strongly. Spot gold rose around 6 per cent and silver climbed about 7 per cent, following sharp losses last week that had raised concerns about forced selling among retail traders.
Oil prices also moved higher, rising about 2 per cent late in New York, supported in part by geopolitical developments in the Middle East.
Earnings and sector divergences
Despite the broader sell-off, there were pockets of strength. Walmart gained around 3 per cent, pushing its market capitalisation beyond US$1 trillion, as its digital business continued to attract customers. PepsiCo rose nearly 5 per cent after delivering solid earnings supported by improving organic sales. Major banks, including JPMorgan and Citigroup, also traded higher.
Investors are now digesting a heavy earnings week, with more than 100 S&P 500 companies reporting. Results from Alphabet, Amazon and AMD are due over the coming days and are expected to shape near-term market sentiment.
Australian market outlook
Australian shares are expected to open lower, following the sell-off on Wall Street. ASX 200 futures are pointing to a fall of 20 points, or 0.2 per cent, to 8,794. The Australian dollar has rebounded above US70¢.
Locally, attention turns to upcoming earnings from Amcor, Centuria Office REIT, Charter Hall Social Infrastructure REIT and Pinnacle Investment Management, while Nufarm is scheduled to hold its annual general meeting.
Data and global focus
On the data front, New Zealand is set to release fourth-quarter labour market figures, with employment expected to show its first quarterly expansion in 18 months. Globally, services and composite PMI data are due from major economies, while US markets will be watching closely for ADP employment data after the postponement of January’s nonfarm payrolls report due to the partial federal government shutdown.
