US sharemarkets edged higher on Tuesday, with the S&P 500 and Dow Jones Industrial Average reaching fresh record highs as strength in semiconductor stocks offset weakness in parts of the technology sector.
The S&P 500 rose 0.13% to close at 7,609.78, marking its first finish above the 7,600 level. The Dow Jones Industrial Average gained 228.91 points, or 0.45%, to 51,307.79, while the Nasdaq Composite added 0.03% to end at 27,093.90.
Semiconductor stocks led gains after Nvidia chief executive Jensen Huang highlighted the growing importance of networking and connectivity infrastructure within artificial intelligence data centres.
Marvell Technology surged 32.5% after Huang suggested the company could become the next trillion-dollar business. The Philadelphia Semiconductor Index jumped 5.9%, while Hewlett Packard Enterprise rose 19.5% after issuing stronger-than-expected guidance and reporting its largest earnings beat since 2018.
Technology gains helped offset weakness in Alphabet, which fell almost 4% after announcing plans to raise US$80 billion through stock sales to fund its artificial intelligence expansion. The funding package includes a US$10 billion investment from Berkshire Hathaway.
Investor sentiment remained supported by confidence in artificial intelligence-driven earnings growth, although some market participants warned that the rally had become increasingly concentrated in a small number of technology stocks.
The latest gains extended a remarkable rebound in US equities. After falling 7% by the end of March, the S&P 500 has now risen more than 11% for the year following one of its strongest nine-week rallies on record.
Australian Market Outlook
Australian shares are expected to open higher following another record session on Wall Street and strong gains across semiconductor and artificial intelligence-linked stocks.
S&P/ASX 200 futures are up 38 points, or 0.4%, to 8,789.
Local technology stocks may benefit from the continued strength in global semiconductor shares, particularly after Marvell Technology and Hewlett Packard Enterprise delivered outsized gains overnight.
Investor attention will also turn to a busy domestic data calendar. First-quarter gross domestic product figures are due at 11.30am AEST and are expected to provide fresh insight into the pace of economic growth.
Superloop and The Lottery Corporation are both scheduled to hold investor days.
Offshore, investors will monitor May services and composite PMI readings across Japan, Europe, the United Kingdom and the United States. In the US, ADP private payrolls data, the ISM services index and the Federal Reserve’s latest Beige Book will also be released.
