The S&P 500 closed modestly lower in New York, ending a seven-day winning streak, as investors reacted to discouraging geopolitical headlines and downbeat US economic data. At the closing bell, the S&P 500 was 0.1 per cent lower and the Dow Jones Industrial Average shed 0.6 per cent. Technology shares offered some resilience, helping the Nasdaq Composite rise 0.4 per cent. Geopolitical concerns centred on ongoing US and Iran negotiations in Pakistan, marred by continued rhetoric from both sides regarding potential resumption of hostilities, despite talks aiming for a ceasefire and the unfreezing of Iranian assets. Meanwhile, oil settled below US$95 a barrel, gold held above US$4700 an ounce, and Bitcoin topped US$73,000. ASX futures pointed to a rise of 70 points, or 0.8 per cent.
Adding to investor caution were two significant US economic reports. The consumer price index (CPI) jumped 0.9 per cent in March, the largest increase since June 2022, primarily driven by a 21.2 per cent surge in petrol prices—the largest since 1967. Over the year to March, the CPI advanced 3.3 per cent, accelerating from 2.4 per cent in February. Concurrently, the University of Michigan’s preliminary April sentiment index slumped to a record low of 47.6 from 53.3 in March, with consumers expecting prices to rise at an annual rate of 4.8 per cent over the next year.
In individual stock movements, Nvidia gained 2.6 per cent and Amazon advanced 2 per cent. Australian software company Atlassian slid another 3.1 per cent, extending its one-month loss to more than 25 per cent. Financial stocks broadly underperformed, albeit modestly, ahead of the major US banks commencing their reporting season next week. FactSet analyst John Butters noted that the S&P 500 could report earnings growth of 19 per cent for the first quarter, based on average improvements, which would mark the highest growth rate since the fourth quarter of 2021.
