US equities climbed as a wave of corporate results and AI-related demand underpinned markets, while a high-profile legal verdict against Meta added a fresh risk for tech investors.
The S&P 500 rose 0.6 per cent, the Dow Jones Industrial Average gained 360 points (0.7 per cent) and the Nasdaq composite added 1.1 per cent, leaving the S&P within about 0.8 per cent of its record earlier this month. By close the indexes stood at 7,757.17 for the S&P, 52,856.09 for the Dow and 26,702.86 for the Nasdaq.
Earnings were a central driver. SpaceX jumped 7.8 per cent after reporting a stronger-than-expected profit, while Tesla topped revenue forecasts with $US28.05 billion for the quarter, narrowly ahead of consensus and sending its shares higher in after-hours trade.
Meta also reported robust revenue, $US64.6 billion, up 26 per cent year-on-year, but faced a significant legal setback. A judge ordered the company to pay New Mexico $US25 billion after a jury found Meta liable for numerous violations of state consumer protection laws tied to the Cambridge Analytica data harvesting episode.
Other earnings winners included Capital One Financial, up 2.5 per cent, and Winnebago Industries, which surged 10.7 per cent after reporting a more resilient profit than expected. On Winnebago’s customer mix CEO Michael Happe noted:
"Our more expensive towable RVs are a tougher sell, but customers are interested in our ‘more accessible’ offerings."
Not all reports pleased investors. Netflix fell 5.3 per cent despite beating profit expectations after flagging a slower revenue-growth outlook for the year-end period. AT&T slid 6.4 per cent after its forecast for an underlying earnings measure underwhelmed some analysts.
AI-related names remained a mixed bag. Nvidia led gains among chipmakers with a 2.5 per cent lift as investors continued to price in demand for AI hardware. By contrast, more leveraged providers of AI capacity such as CoreWeave were volatile, swinging between sizeable gains and losses intraday. Super Micro Computer said demand for AI platforms should lift its summer revenue guidance, sending its stock up 9.5 per cent.
Bond and commodity moves reflected the same refrain of uncertainty. The yield on the US 10-year Treasury climbed back to 5.12 per cent, while Brent crude traded around $US108.82 a barrel after moving between roughly $US97 and $US112 through October amid geopolitical concerns.
For Australian investors, the local market looked set for a subdued start. ASX futures pointed to a tiny loss of 1 point at the open after the S&P/ASX 200 rose 0.2 per cent the previous session. The Australian dollar was firmer at US70.28¢ in early AEDT trade, a factor that will influence commodity exporters and listed companies with large offshore earnings.
Looking ahead, corporate results and legal and regulatory developments in the US will remain important for local markets given the weight of global tech and AI stocks. Investors are watching whether strong top-line results can justify lofty valuations amid persistent worries about inflation, higher borrowing costs and the costs of expanding AI infrastructure.
Practical implications for households and fund investors include continued market volatility around big tech rulings and earnings beats or misses, plus pressure on interest-rate-sensitive sectors from elevated global yields. For now, the market narrative is a mix of earnings-driven optimism and caution about legal risks and the cost of financing AI-driven growth.
