Wall Street dips, ASX set to inch up

Nvidia was also weighing on the market. Its 0.1 per cent dip took a tiny bit of shine off its jaw-dropping run. Its stock is still up more than 50 per cent so far this year after soaring nearly 240 per cent last year amid Wall Street’s frenzy around artificial-intelligence technology.

Even though Nvidia’s stock change was so small, it packs an extra weight on the S&P 500 because it’s the third-largest stock on Wall Street by market value. It and a handful of other Big Tech companies have been responsible for a huge, disproportionate amount of the S&P 500’s rally since its bottom in October 2022.

To see how top-heavy the market has become, consider how the S&P 500 would be behaving if it gave each stock’s movement the same weight. The S&P 500 is beating that equal-weighted index on a one-year rolling basis by a wide margin, “just a whisker shy of the Dot.com bubble record highs,” according to strategists at Barclays.

Unlike that bubble, though, the companies driving the growth this time are actually making profits and not flying on just hype.

“As such the investment case for continued outperformance remains intact, but arguably more vulnerable to occasional corrections, given ebullient sentiment,” according to the strategists led by Stefano Pascale and Anshul Gupta.

Along with tech stocks, cryptocurrency prices have also been running higher. Bitcoin rose above $US57,000 and is up by more than a third so far this year already.

New exchange-traded funds that hold bitcoin have made investing in the cryptocurrency easier, while also driving business for Coinbase and others who safeguard those ETFs’ bitcoins. Coinbase rose 0.1 per cent Tuesday to bring its gain for the year so far to nearly 12 per cent.

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Earnings reporting season is winding down for the big companies in the S&P 500, and the hope is that a remarkably solid US economy will help profits grow through this year.

A report in the morning showed orders for long-lasting manufactured goods were weaker last month than economists expected, but they were better than forecast after ignoring airplanes and other transportation items.

A separate report said that confidence among US consumers unexpectedly slipped. Confidence had been on the upswing, and it’s a closely followed figure on Wall Street because spending by consumers makes up the bulk of the US economy.

On the upside for investors, the report also showed that expectations for inflation among US consumers ticked down a bit.

Treasury yields were mixed but holding relatively steady following the reports. Yields have been climbing so far this year as traders push back forecasts for when the Federal Reserve may begin cutting interest rates.

The Fed has already pulled its main interest rate to the highest level since 2001 in hopes of grinding down high inflation. With inflation cooling since its peak two years ago, the Fed has said it may cut rates several times this year. But a suite of stronger-than-expected reports on the economy have pushed back expectations for the start of those cuts toward June from March.

In stock markets abroad, indexes were mostly higher across Asia and Europe. Stocks jumped 1.3 per cent in Shanghai but sank 0.8 per cent in Seoul. Tokyo’s Nikkei 225 was little changed, remaining near its highest level in history.