Wall Street was poised for a rebound Thursday and oil prices fell modestly even as the U.S. said it had conducted a “heavy wave” of strikes against Iran. Futures for the S&P 500 jumped 0.5 per cent, while futures for the Dow Jones Industrial Average rose 0.4 per cent. Futures for the tech-heavy Nasdaq climbed 1.3 per cent. Markets appeared to shift their focus toward mostly solid corporate earnings while still absorbing the Federal Reserve’s decision a day earlier to leave its benchmark borrowing rate alone for the time being. Microsoft shares soared more than 9 per cent after it breezed past Wall Street profit expectations on the strength of its Azure cloud services business. On the flip side, Facebook parent company Meta tumbled 8.3 per cent after it missed profit targets while logging US$42 billion in costs and expenses, a 55 per cent increase over the same period a year ago. Investors remain concerned about if and when companies like Meta will begin to see profits from their massive investment in artificial intelligence. In South Korea, the Kospi fell modestly after losing more than 16 per cent over the past two days due to selling of AI stocks. The Kospi fell 1.2 per cent to 5,593.56, after a 10.8 per cent drop on Tuesday and a nearly 6 per cent loss on Wednesday. The benchmark is down more than 38 per cent from its all-time closing high of more than 9,100 in June, though it’s still up nearly 30 per cent so far this year. Wild swings in the Kospi, a big beneficiary of the global boom in artificial intelligence, have been viewed by some analysts as a reflection of broader doubts about massive investments in building AI capacity. Samsung Electronics fell 0.7 per cent, even after the South Korean technology giant reported a record operating profit for the latest quarter, largely in line with estimates. Chipmaker SK Hynix lost 5.6 per cent after sinking more than 9 per cent on Wednesday, when it also reported a record quarterly operating profit, which ballooned nearly sixfold. That was still lower than what analysts had expected and disappointed investors dumped its shares. In Tokyo, the Nikkei 225 gained 0.7 per cent to 61,867.43, recovering some of its losses after falling 1.5 per cent a day earlier. Open-AI investor SoftBank Group fell 2.5 per cent. But computer chip equipment maker Tokyo Electron climbed 4.5 per cent. Memory chipmaker Kioxia Holdings added 2.9 per cent. Taiwan’s Taiex, which was also lifted by the AI boom, closed 0.3 per cent lower. Its leading chipmaker TSMC edged up 0.2 per cent. Hong Kong’s Hang Seng edged up 0.2 per cent to 25,858.88. The Shanghai Composite index lost 0.6 per cent to 3,804.69. U.S. markets stabilized Thursday morning after falling a day earlier when Fed officials voted to keep the U.S. central bank’s benchmark interest rate steady. Three members of the policymaking committee did want to raise rates. The Fed’s chairman, Kevin Warsh, implied the bond market may already be doing some of the work to restrain inflation, and he pointed to how yields have climbed since the central bank’s last meeting six weeks ago. In the bond market, the yield of the U.S. 10-year Treasury was at 4.68 per cent, up from 4.61 per cent late Tuesday. Warsh reiterated his commitment to get inflation back to 2 per cent following years of faster-than-hoped increases in prices, but he also stuck to his plan of giving financial markets fewer clues about what the Fed may do with interest rates in the near future. Higher rates can keep a lid on inflation, but they can also slow the economy and undercut prices for stocks and other investments. In energy trading, the recent jump in oil prices subsided somewhat despite ongoing fighting in the Middle East. Brent crude, the international standard, slipped US$1.06 to US$87.03 per barrel after rising earlier. It was trading around US$72 a barrel in late February, before the Iran war began. Benchmark U.S. crude lost US$1.10 to US$83.36 per barrel. At midday in Europe, Britain’s FTSE 100 rose 0.4 per cent, France’s CAC 40 surged 0.9 per cent and Germany’s DAX ticked up 0.2 per cent. ___ Chan Ho-him, The Associated Press
