ASX set to slide, Wall Street spirals after Trump escalates his trade war

Good news came on both those economic fronts on Thursday.

One report showed inflation at the wholesale level last month was milder than economists expected. It followed a similarly encouraging report from the prior day on inflation that US consumers are feeling.

But “the question for markets is whether good news on the inflation front can make itself heard above the noise of the ever-changing tariff story,” said Chris Larkin, managing director, trading and investing, at E-Trade from Morgan Stanley.

A separate report, meanwhile, said fewer US workers applied for unemployment benefits last week than economists expected. It’s the latest signal that the job market remains relatively solid overall. If that can continue, it could allow US consumers to keep spending, and that’s the main engine of the economy.

On Wall Street, some stocks connected to the artificial-intelligence industry resumed their slide and weighed on stock indexes. Palantir Technologies, which offers an AI platform for customers, sank 5.4 per cent. Super Micro Computer, which makes servers, lost 6.7 per cent. Nvidia swung between gains and losses before dipping 0.2 per cent.

Such stocks have been under the most pressure in the US stock market’s recent sell-off after critics said their prices shot too high in the frenzy around AI.

Other areas of the market that had also been riding big earlier momentum have seen their fortunes swing drastically. Elon Musk’s Tesla fell 4.2 per cent following a rare back-to-back gain, and it’s down more than 40 per cent so far in 2025.

American Eagle Outfitters dropped 4 per cent after the retailer said “less robust demand and colder weather” has held back its performance recently. It forecasted a dip in revenue for the upcoming year, though it also delivered a stronger profit report for the latest quarter than analysts expected.

On the winning side of Wall Street was Intel, which jumped 13.7 per cent after naming former board member and semiconductor industry veteran Lip-Bu Tan as its CEO. Tan, 65, will take over the daunting job next week, more than three months after Intel’s previous CEO, Pat Gelsinger, abruptly retired amid a deepening downturn at the once-dominant chipmaker.

In the bond market, Treasury yields lost an early gain to sink lower. The yield on the 10-year Treasury fell to 4.26 per cent from 4.32 per cent. The yield has been mostly dropping since January, when it was approaching 4.80 per cent, as traders and economists have ratcheted back their expectations for US economic growth.

While few are predicting an imminent recession, particularly with the job market remaining relatively solid, recent reports have shown a souring of confidence among US consumers and companies.

In stock markets abroad, indexes fell across much of Europe and Asia, but the moves were relatively modest.

The Market Recap newsletter is a wrap of the day’s trading. Get it each weekday afternoon.