Australian Sharemarket Set to Dip as Wall Street Slumps on AI Stocks

The Australian sharemarket is expected to dip at the open, following losses on Wall Street. The S&P 500 fell 0.6 per cent, while the Dow Jones Industrial Average dropped 89 points, or 0.2 per cent. AI stocks were among the leading decliners, with Micron Technology plummeting 7.6 per cent and Nvidia down 2.1 per cent.

The sharp decline in AI stocks is a reversal of their recent gains. Despite this downturn, these companies remain big winners, with Micron more than tripling in value this year. However, critics argue that they are too expensive, and high interest rates have made investors less willing to pay premium prices for them.

The yield on the 10-year US Treasury remained above its pre-war level of 3.97 per cent, and oil prices continued to rise, further pressuring yields. The price of Brent crude ticked up by 0.4 per cent to $US91.24, driven by uncertainty over a potential deal between the United States and Iran.