Morning Wrap: ASX 200 to fall, S&P 500 and Nasdaq sink amid tech selloff, Gold and silver bounce

ASX 200 futures are down 40pts (-0.45%) as of 8:30 am AEDT.

In a nutshell:

• Major US benchmarks mostly lower but finished off worst levels

• Software stocks continued to tumble, with most names down 5-10%

• Commodity prices bounced, with gold up ~6%, silver up 8%, copper up 4.5% and back above US$6/lb

Let's dive in.

S&P 500 SESSION CHART

S&P 500 lower but off worst levels (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks mostly lower but finished well-above worst levels

• S&P 500 and Nasdaq down as much as 1.6% and 2.4% respectively, amid a sharp selloff across tech and software stocks

• Session marked a clear rotation into select cyclicals and defensives, Energy and Materials both up more than 2%, Staples and Utilities up more than 1%

• Software obliteration continued, with notable decliners including SAP (-4.8%), Salesforce (-6.8%), Shopify (-9.7%), Adobe (-7.3%), Snowflake (-9.1%), Workday (-7.0%)

• Software sell-off intensified as AI disruption fears continues with Claude legal tool the latest threat (FT)

• BofA expects gold and silver volatility to stay elevated after the precious metals exodus from all-time highs (BBG)

• Walmart becomes first retailer to hit $1tn in market cap (RT)

• Silver rally may become "death trap" for Reddit traders, likened to a ‘meme stock’ (FT)

• Bitcoin drops to US$76,000, the lowest price since Trump's election victory (BBG)

• Global bond issuance hits $1tn rapidly as borrowers capitalise on soaring demand (BBG)

• S&P 500 has experienced average 16% drawdown in six months after Fed leadership change, notes Barclays (BBG)

STOCKS

• SpaceX confirms acquisition of xAI, valuing combined company at $1.25tn (BBG)

• Nvidia CEO Huang denies OpenAI drama, says company still on track to invest (CNBC)

• Novo Nordisk says sales will drop this year amid competition and US government efforts to lower prices (BBG)

• Disney names parks chief Josh D'Amaro as its next CEO, effective 18-March (CNBC)

• PepsiCo cutting the price of Doritos, Cheetos and other snacks by up to 15% (FT)

• Alphabet plans to dramatically expand its presence in India, eyeing new space in Bangalore (BBG)

• PayPal replaces CEO, board cites need for faster change (FT)

• Intel CEO forecasts memory shortage to persist until 2028 (BBG)

• OpenAI dissatisfied with some Nvidia chips for inference workloads, reportedly looking for alternatives (RT)

• Oracle's $25bn bond offering sees strong demand, investors reassured by pledge to maintain investment-grade rating (FT)

• Palantir guides revenue above, underpinned by US government demand for its AI tools, shares rally 6.8% (FT)

• Google ramps up spending on nuclear and geothermal power for AI data centres (WSJ)

• Waymo raises $16bn in latest funding round, valuing the loss-making company at $126bn (BBG)

TARIFFS

• Trump says India agrees to US trade deal for petroleum, defence and aircraft, also ends buying Russian oil (FT)

• Trump warns US will do "something very substantial" if Canada proceeds with China trade agreement (RT)

• US and South Korea's top diplomats will meet in Washington this week for talks on trade, critical minerals (YH)

CENTRAL BANKS

• Fed's Miran reiterates call for aggressive rate cuts this year (FB)

• Fed's Barkin says inflation remains above target, though rate cuts have helped the labour market (BBG)

• Fed's Bostic reiterates view that Fed should not cut rates at all this year (RT)

• RBA raises cash rate by 25 bp as expected amid persistently elevated inflation and strong demand (BBG)

GEOPOLITICS

• Iran demands changes to format for upcoming nuclear talks this Friday, threatening diplomatic progress (AX)

• EU to pitch the US on a critical minerals partnership to curb China's influence (BBG)

• Iran willing to suspend or shut nuclear program to de-escalate tensions with US (NYT)

ECONOMY

• South Korean inflation slows in-line with expectations, BOK seen on hold amid won volatility, financial stability risks (BBG)

ASX TODAY

• Amcor reports Q2 revenue up 68% to $5.4bn due to Berry acquisition, EPS of 86 cents vs. 85 cents ests, interim dividend of 65 cps, reaffirms full-year guidance (AMC)

• CVC guides to a CY25 net loss of $6.3-7.0m (CY24: $1.6m), with no interim dividend (CVC)

• Maas Group to extend current on-market buyback of up to 10% shares for a further 12 months (MGH)

• Nufarm notes positive start to the year, reaffirms FY26 guidance including “strong” underlying EBITDA growth and positive free cash flow (NUF)

• Pinnacle reports 1H25 NPAT down 11% to $67.3m vs. $70.6m ests (4.6% miss), interim dividend of 29 cps vs. Macquarie ests of 25 cps (16% beat), record net inflows of $17.2bn missed ests of $18.4bn, closing FUM of $202.5bn also fell short of $208.4bn ests (PNI)  

• TerraCom holder Gleneagle Securities raises stake to 45.84% from 19.98% (TER)

WHAT TO WATCH TODAY

• Resources bounce: Strong overnight session for commodities, with most bouncing following the steepest selloff in decades last Friday. Most of our overnight resource-related ETFs rallied 4-6%, though this was relatively in-line with how local miners performed on Tuesday.

• Tech: A very, very ugly session for all things software. Interesting comment from the Jefferies trading desk: "I ask clients, ‘what’s your hold-your-nose level?’ and even with all the capitulation, I haven’t heard any conviction on where that is. People are just selling everything and don’t care about the price." The Cloud and FinTech ETFs fell 5-6% overnight, which could point to more pain for local tech.

BROKER MOVES

Broker data still pending. Check out the Evening Wrap for a full breakdown of today's notes.

Stocks trading ex-dividend: 

• Wed 4 Feb: Qualitas Real Estate Income Fund (QRI) – $0.01

• Thu 5 Feb: None

• Fri 6 Feb: None

Other ASX corporate actions today:       

• Dividends paid: None

• Earnings: Amcor (AMC), Pinnacle Investment Management (PNI)

• IPOs: None

• AGMs: None

Economic calendar (AEDT):

• 9:00 am: Australia Ai Group Industry Index (JAN)

• 9:00 pm: Eurozone Inflation rate (JAN)

• 2:00 am: US JOLTs Job Openings (Dec)

• 2:00 am: US ISM Services PMI (JAN)