Stock markets on both sides of the Atlantic clawed back some of their steep losses in the wakeup call from low-cost artificial intelligence startup DeepSeek, which prompted investors to question whether the AI boom is a one-way bet.
Wall Street’s Nasdaq Composite was up 1.7% at 7am in Auckland, while Germany’s DAX advanced 0.7%, with gains among the most beat-up stocks such as Nvidia, Oracle and Siemens Energy.
“US equities recovered from the sharp fall the previous session, which was driven by concerns that cheaper artificial intelligence models, could impact US dominance in the technology,” Bank of New Zealand interest rate strategist Stuart Ritson said in a note.
Pork processor Smithfield Fields gained 5.3% on its Nasdaq debut in its scaled back initial public offering to raise US$522 million.
Earnings were mixed with five of the Magnificent 7 companies due to report later in the week.
Luxury giant LVMH beat expectations after the French market closed and cruise operator Royal Caribbean reported record bookings and raised its outlook, while defence contractor Lockheed Martin fell short of predictions and JetBlue Airways shares slumped on its soft guidance.
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General Motors beat earnings expectations, but investors were wary of the impact of the Trump administration’s looming tariff regime.
US President Donald Trump pledged to impose tariffs on semiconductors, computer chips, pharmaceuticals, steel, copper and aluminium.
The US dollar gained against G10 currencies during the Asia trading session on Tuesday after a report in the Financial Times that Treasury secretary Scott Bessent is pushing for a universal tariff on US imports, starting at 2.5% and rising gradually. Trump said he wanted a bigger rate than that.
The kiwi dollar traded at 56.64 US cents at 7am in Auckland from 56.57 cents yesterday.
Investors are preparing for the US Federal Reserve’s upcoming policy review, which is expected to keep the fed funds rate at the 4.25%-to-4.5% range. The Bank of Canada is expected to cut its benchmark rate when it reviews its policy.
Locally, Reserve Bank chief economist Paul Conway will deliver a speech with a Q&A session on New Zealand’s neutral interest rate and its drivers, while across the Tasman Australian December quarter inflation data are due.
Reporting by Paul McBeth. Image from Alexandre Debiève on Unsplash.