The Overnight Report: Nasdaq Down, Dow Up

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This story features WOODSIDE ENERGY GROUP LIMITED, and other companies.
For more info SHARE ANALYSIS: WDS
The company is included in ASX20, ASX50, ASX100, ASX200, ASX300 and ALL-ORDS

Chip stocks, led by AMD, led the selling in Nasdaq. Bitcoin fell more than -3%, while the Dow Jones rose on funds rotating.

The ASX200 rallied yesterday thanks to miners, energy and banks, while software and technology stocks were sold off heavily. 

SPI futures are signalling a negative start to Thursday's session.

Good Morning,

Technology stocks fell sharply yesterday on AI ‘wipeout’ concerns mimicking the Nasdaq SaaS sell off. The sector fell -9.4%.

The ASX200 still rose 71 points or 0.8% to 8,928 led by miners (up 3.5%), energy and gold miners with ongoing support for banks. 

What happened overnight, NAB Markets Today Research extract

US technology stocks fell again as weak AMD results were layered onto the ongoing debate between upside for the big AI players versus tech companies that may face AI disruption. 

Other asset classes have been calmer, with barely any net move in US Treasury yields. Precious metals are little changed on the session.

Initially, the US reportedly rejected Iranian requests to change the location and format of upcoming nuclear talks, raising the risk that negotiations scheduled for later this week may stall.

Late in the session, the Iranian foreign minister was quoted as saying talks will proceed in Oman on Friday, rather than the initially discussed Turkey, and oil gains quickly moderated.

From the macro data, US services momentum looks solid but uneven. ISM services held at 53.8 in January, supported by a jump in business activity to 57.4, but offset by softer new orders (53.1) and a slip in employment to 50.3. The final S&P Global services PMI, released just prior, was revised up 0.2pt from the flash reading to 52.7.

In US labour data, ADP showed just 22k private job gains, well below expectations, reinforcing the slowdown already evident in broader hiring indicators. The more important non farm payrolls report for January will now be released on 11 February, according to a revised release schedule from the BLS.

Euro area inflation eased as expected in January, with headline CPI at 1.7% y/y and core slowing to 2.2%, while services inflation cooled to 3.2%. Much of the softness reflects energy base effects, limiting the policy signal. Markets treated the release as confirming the ECB remains in its self-described “good place.”

Short-end EUR markets price only a modest chance of further ECB easing this year.

In rates, Treasury markets largely looked through both the ADP and ISM releases, treating them as consistent with gradual cooling rather than renewed strength or stress. The 10-year UST is around 4.27%. 

The US Treasury rounded out the quarterly refunding announcements by leaving coupon and FRN auction sizes unchanged across the curve, signaling it expects to maintain current issuance levels for “at least the next several quarters.” 

Some potential upward adjustment to coupon issuance was floated in the November 2025 refunding round, and the TBAC minutes this time hinted this could occur in late 2026, as Treasury looks to smooth a potential funding shortfall of ~US$1.1trn in FY27-28.

In foreign exchange markets, the USD is up ~0.47% on DXY, with AUD/USD back just below 0.70 after a ~0.6% fall. The JPY continues to weaken, with USD/JPY approaching 156.9, narrowing net falls since the NY Fed “rate checks” in late January to about 1%.

The S&P500 closed down by -0.51% with the Dow Jones up 0.53%, while Nasdaq Composite lost -1.5%. AMD shares fell -17%; the worst day since 2017 after disappointing 1Q2026 results.

Alphabet reported after the close and is trading down -1.5% with shares swinging between positive and negative territory. Capex spend came in between US$175bn-$185bn, nearly twice the spend in 2025.

Global Equity Pulse: Franklin Templeton extract

The investment case for Japanese equities remains attractive in 2026, as economic normalization and sustained inflation continue to provide growth tailwinds. A broadening of corporate reforms is also underway, driving structural enhancements of shareholder returns.

At Templeton Global Investments, recent company meetings and visits reaffirmed our confidence in Japanese equities by giving us further evidence of corporate Japan’s commitment to growth execution and capital allocation discipline, all to the potential benefit of investors.

In the United States, the nomination of Kevin Warsh as the next Federal Reserve (Fed) chair should cause little concern in the market, given his rich experience.

Focusing on fundamentals and valuations, we believe cyclicals and consumer discretionary stocks are likely to benefit most from tailwinds such as the expectation of unusually strong tax refunds and improved liquidity conditions.

In Asia Pacific (APAC), earnings growth acceleration underpins a constructive regional outlook. Taiwan and South Korea are expected to lead in growth, benefiting from robust artificial intelligence (AI) infrastructure capex and strength in memory chip pricing.

South Korea’s corporate reform potential also looks compelling. Solid earnings growth and attractive dividend yields are similarly expected in Europe, supported by moderate economic expansion and resilient corporate margins. Utilities and industrial companies stand to benefit from investments in energy infrastructure, electrification, defense and reshoring initiatives.

In North America, on January 30, US President Trump nominated Kevin Warsh to succeed Jerome Powell as chair of the Board of Governors of the Federal Reserve. After being confirmed by the US Senate, Warsh would become chair when Powell’s term ends in May.

In our view, financial markets should welcome Warsh’s appointment. Warsh has experience, having served as a governor of the Federal Reserve Board from 2006-2011. He was present for all major decisions during the global financial crisis and therefore understands well both the everyday and crisis-management tools and role of the Fed.   

In Asia Pacific, markets had a mixed showing in January, enduring renewed concerns of geopolitical uncertainties and US tariff threats.

We nonetheless maintain our constructive view on the regional outlook. APAC companies have navigated the worst of global trade headwinds and, barring surprise macroeconomic shocks, should see faster growth in 2026. Supportive monetary or fiscal policies across a range of key APAC markets —such as India, Japan and potentially China— may provide a conducive backdrop as well.     

In Europe, in many important respects, we emerge in 2026 with a manifestly different Europe than in recent years, one molded by years of financial turmoil, Brexit, energy crises, war in Ukraine and now, difficult trading relations with the United States.

We believe this new Europe has the potential to undo more than a decade of global equity market underperformance, with 2025 beginning to reveal early signs of that shift. The debate triggered by former European Bank Central Bank President Mario Draghi’s report on European competitiveness highlighted a growing recognition that structural reform, capital investment and improved policy coordination are no longer optional.

That acknowledgement, alongside a more pragmatic fiscal stance in Germany and a clearer commitment to collective defense spending, points to a region with a more durable growth outlook than investors have been accustomed to.

Global equity markets advanced in January, though returns were uneven across regions as geopolitical developments, sector rotation and policy-related uncertainty shaped investor positioning.

The MSCI World Index rose on the back of strong gains in Europe and continued resilience in parts of Asia, while US equities lagged. Risk appetite was robust early in the month. However, momentum moderated later in January as markets contended with heightened geopolitical tensions, growing scrutiny of US monetary policy independence and the early stages of fourth-quarter earnings season.

Sector dispersion was a defining feature of the month. Defense, industrials and selected technology segments outperformed, reflecting elevated geopolitical risk and continued investment in strategic and security-related themes, while consumer-oriented sectors and parts of global growth underperformed.

Commodities and precious metals benefited intermittently from geopolitical uncertainty and concerns around resource security, contributing to strength in materials-heavy markets.

Corporate news in Australia

-Shell is selling 16.7% of Woodside Energy’s ((WDS)) North West Shelf project 

-Macquarie Asset Management ((MQG)) is lining up $5bn in debt for its Qube Holdings ((QUB)) takeover bid

-Affinity Equity is restarting Scottish Pacific sale with price expectations around $1-$1.5bn

-Suncorp Group ((SUN)) might be a possible takeover target as insurers’ profits rise

-MA Financial ((MAF)) sells Corrimal Village for $103m

-Real Pet Food Group is looking at a $1bn-plus sale with General Mills a key candidate

-Perth Radiological amoung $5bn of imaging businesses set for sale with a $1bn valuation

-Generation Development Group ((GDG)) shorts grow as escrow for Evidentia shareholders expiry approaches

-Octopus invests $3.8bn in Australia building the country’s largest battery in NSW

-GPU-as-a-service Sharon AI’s non-deal roadshow and site visits at partner NextDC ((NXT)) started this week

On the calendar today:

-AU Dec Trade Balance

-EZ ECB MonPol Decision

-UK BOE MonPol Decision

-US Dec/2025 Trade Balance

-US Weekly Jobless Claims

-BEACH ENERGY LIMITED ((BPT)) 1H26 Earnings

FNArena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/

The Australian share market over the past thirty days…

For more detail go to FNArena’s Australian Broker Call Report, which is updated each morning, Mon-Fri.

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