Stocks on Wall Street were mixed as the latest round of restrictions on US exports of chips used for artificial intelligence applications weighed on the likes of chipmaker Nvidia, while a potential hike in Medicare reimbursement bolstered healthcare stocks and rising oil prices buoyed energy companies.
The tech-heavy Nasdaq was down 0.8% at 7am in Auckland, while the Dow Jones Industrial increased 0.5%.
Nvidia and Intel were among chipmaking companies to decline after US President Joe Biden announced plans to further restrict AI chips in the White House’s latest attempt to stymie Chinese ambitions in the sector. New Zealand is among the 18 companies exempt from the regime.
A report in the Information that some major Nvidia customers are delaying orders of the latest Blackwell racks added to the downbeat tone for the chipmaker.
Meanwhile, healthcare companies such as UnitedHealth Group and CVS Health rallied on the Biden administration proposed increasing the 2026 reimbursement rates for Medicare Advantage plans.
A healthy deal
Johnson & Johnson gained on news it plans to buy mental illness drug developer Intra-Cellular Therapies for US$15 billion, while Moderna sank almost 20% after the pharmaceutical company slashed its sales guidance.
A 1.7% increase in Brent crude oil to US$81.09 a barrel supported energy companies such as Chevron, although carriers such as American Airlines, British Airways-owner IAG and Wizz Air declined on the prospect of more expensive jet fuel.
Equity market investors already nervous about risk-sensitive assets after last week’s strong US jobs data heightened the chances that interest rates won’t come down as quickly as anticipated rising inflation.
That’s kept the greenback propped up and government bond yields elevated with the yield on 10-year US Treasuries creeping up to 4.78%, a spread of 15 basis points above the 4.63% yield on New Zealand’s equivalent.
The kiwi held near a two-year low trading at 55.60 US cents at 7am from 55.62 cents yesterday.
“The kiwi is little changed this morning after a whippy night saw it trade a 55.42 US cents-to-55.72 cents range, having made yet another cycle low last night, but it hasn’t collapsed,” ANZ New Zealand economists said in a note.
Locally, the New Zealand Institute of Economic Research’s quarterly survey of business opinion is due, while an Australian consumer confidence is also scheduled for release.
Reporting by Paul McBeth. Image from Brian Kostiuk on Unsplash.