Good morning. US equities finished lower overnight. The Nasdaq fell 1.3% to 26,167 and the S&P 500 eased 0.4% to 7,473, with SpaceX down 16% after it moved to raise about US$20bn in its first bond sale, days after its record listing. Treasury yields slipped a few basis points, the 10-year to 4.46% and the 2-year to 4.19%, though both remain near one-year highs after the Federal Reserve, under new chair Kevin Warsh, dropped its easing bias. Oil fell, with WTI down 3.3% to US$74.08, after the United States cleared Iran to sell crude in dollars and said the Strait of Hormuz would stay open.
Two of the day's largest developments were about the cost of building artificial intelligence. Microsoft and Chevron signed a 20-year deal for Chevron to supply about 2.7 gigawatts of gas-fired power to a West Texas data centre, and Oracle disclosed that it cut about 21,000 jobs, or 13% of its workforce, partly to fund its own data-centre build-out. SpaceX is turning to the bond market for the same reason. The money going into AI infrastructure is large and rising, and investors are paying closer attention to how it is financed, with the Fed signalling that rates are more likely to stay high than fall.
Locally, the ASX 200 ended its most recent session at 8,829, down 0.9%, with the miners the heaviest drag after BHP flagged a US$2.3bn writedown on its Jansen potash project in Canada. ASIC put the private-credit sector on notice, asking funds to make sure their 30 June asset valuations are current and realistic. And Alan Greenspan, who chaired the Federal Reserve for 19 years, died at 100, as his successors reshape how the institution communicates.
BHP's US$2.3bn Jansen writedown weighed on the materials sector; iron ore held near US$101 a tonne.
A regulator survey of 22 managers, 52 funds and about $76bn in assets found credit deterioration emerging unevenly, with pockets of higher defaults, impairments and loan amendments.
The Australian dollar is steady at US$0.7006, down 1.0% over five days as the US dollar firmed.
Brent, at US$80.59, is down 7.7% over five days as the US-Iran agreement eased supply fears.
The June FOMC under new chair Kevin Warsh dropped forward guidance, and its projections pointed to rate increases rather than cuts as the more likely path for 2026.
The stock has lost roughly a quarter of its value over three days since its record IPO, as investors weigh how its AI ambitions will be funded.
Food earnings rose 5.4% to $261.8m while Hardware & Tools earnings fell 6.3% to $177.3m on weak trade markets; underlying earnings were 24.5c a share.
The expansion's cost estimate has risen to US$6.9bn from US$4.9bn, with first Stage 2 output now expected toward the end of 2031.
The company is seeking buyers for the project's remaining capacity, is moving to increase its stake in the Browse gas fields, and said it is not in takeover talks with Exxon Mobil.
Contracted utilisation has risen to 667MW and the company is targeting $1bn of EBITDA by 2030, against current-year guidance near $235m. Goodman and Macquarie Technology carry similar data-centre exposure on the ASX.
The company is redirecting cash toward data-centre capacity, with planned capital spending lifted to about US$35bn for the year.
The Reeves County project is designed to draw about 2.7 gigawatts, enough for roughly 2 million homes, with first power targeted for 2028.
The deal gives Meta a stake of about 20% in Cred, which rewards customers for paying their credit-card bills on time.
The Phase 3 study tested the drug in previously treated non-squamous non-small cell lung cancer, where Pfizer had positioned it as a potential first-in-class therapy.
Lilly agreed in March to buy Centessa, a developer of treatments for excessive daytime sleepiness and other neurological conditions, for about US$6.3bn upfront plus a US$1.5bn contingent payment.
“The commitment to deliver is strong, unanimous and unambiguous, and that's an important message we've missed for five years, and we're going to fix that.”
“We are putting out as much capacity as we possibly can, as quickly as we can.”
“For the 60 days that we're negotiating the final deal, there will be toll-free access in and out of the Strait of Hormuz.”
“Power really is becoming the great limiting element for growth.”
“I want to be very clear that inflation remains too high.”
“Lift your game, or you're going to be hearing from us more and more.”
For wholesale clients only. Prepared by Arc Point OCIO Pty Ltd (ACN 693 569 765), Corporate Authorised Representative (CAR 1319046) of Capella Advisory (AFSL 550125), for wholesale clients within the meaning of the Corporations Act 2001 (Cth); it is not intended for, and should not be relied on by, retail clients. This note is factual market reporting and general information, with any arcpoint view clearly labelled as such. It is not personal advice and does not take into account any person's objectives, financial situation or needs. Information is drawn from sources believed to be reliable but its accuracy and completeness are not guaranteed. Past performance is not a reliable indicator of future performance.
Sources: Yahoo Finance, FRED, RBA, company filings.