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Artificial intelligence stocks have begun to waver slightly, experiencing a selloff period in the first week of this month. The Nasdaq has fallen approximately 2%, wiping out around $500 billion in market value from top technology companies.
Palantir Technologies dropped nearly 8% despite beating Wall Street estimates and issuing strong guidance, highlighting growing investor concerns about stretched valuations in the AI sector.
Nvidia shares also fell roughly 4%, while the broader selloff extended to Asian markets, which experienced some of their sharpest declines since April.
Wall Street executives, including Morgan Stanley CEO Ted Pick and Goldman Sachs CEO David Solomon, warned of potential 10-20% drawdowns in equity markets over the coming year.
And Michael Burry, famous for predicting the 2008 housing crisis, recently revealed his $1.1 billion bet against both Nvidia and Palantir, further pushing the narrative that the AI rally may be overextended.
As we near 2026, the sentiment around AI is seemingly starting to shift, with investors beginning to seek evidence of tangible returns on the massive investments flowing into AI, rather than simply betting on future potential.
However, despite the recent turbulence, many are simply characterising this pullback as "healthy" profit-taking rather than a fundamental reassessment of AI's value.
Supreme Court Raises Doubts About Trump’s Tariffs
The US Supreme Court heard arguments overnight on the legality of President Donald Trump's "liberation day" tariffs, with judges from both sides of the political spectrum expressing scepticism about the presidential authority being claimed.
Trump has relied on a 1970s-era emergency law, the International Emergency Economic Powers Act (IEEPA), to impose sweeping tariffs on goods imported into the US.
At the centre of the case are two core questions: whether the IEEPA authorises these sweeping tariffs, and if so, whether Trump’s implementation is constitutional.
Chief Justice John Roberts and Justice Amy Coney Barrett indicated they may be inclined to strike down or curb the majority of the tariffs, while Justice Brett Kavanaugh questioned why no president before Trump had used this authority.
Prediction markets saw the probability of the court upholding the tariffs drop from 40% to 25% after the hearing.
The US government has collected $151 billion from customs duties in the second half of 2025 alone, a nearly 300% increase over the same period in 2024.
Should the court rule against the tariffs, potential refunds could reach approximately $100 billion.
The court has not indicated a date on which it will issue its final ruling, though the Trump administration has requested an expedited decision.
Shutdown Becomes Longest in US History
The US government shutdown entered its 36th day today, officially becoming the longest in history. It surpasses the previous 35-day record set during Trump's first term from December 2018 to January 2019.
The Senate has failed 14 times to advance spending legislation, falling short of the 60-vote supermajority by five votes in the most recent vote.
So far, approximately 670,000 federal employees have been furloughed, and 730,000 are currently working without pay. Over 1.3 million active-duty military personnel and 750,000 National Guard and reserve personnel are also working unpaid.
SNAP food stamp benefits ran out of funding on November 1 — something 42 million Americans rely on weekly. However, the Trump administration has committed to partial payments to subsidise the benefits, though delivery could take several weeks.
Flight disruptions have affected 3.2 million passengers, with staffing shortages hitting more than half of the nation's 30 major airports. Nearly 80% of New York's air traffic controllers are absent.
From a market perspective, each week of shutdown reduces GDP by approximately 0.1%. The Congressional Budget Office estimates the total cost of the shutdown will be between $7 billion and $14 billion, with the higher figure assuming an eight-week duration.
Consumer spending could drop by $30 billion if the eight-week duration is reached, according to White House economists, with potential GDP impacts of up to 2 percentage points total.
August – A Challenging Month for Markets A wave of volatility swamped the markets in August. Recession fears, yield curve inversion, and the big breach of the Yuan were the dominant headlines that alarmed investors throughout the month. Bearing the brunt of the tit-for-tat tariff hikes, the stock market saw multiple days of 1% swings with a couple of sharp pullbacks above 2%.
Money was flowing into safe-havens- and Gold rose above the $1,500 mark for the first time in six years. Yield Curve – A Warning Signal Probably, the most closely watched indicator of an impending recession is the Yield Curve. Over the course of the month, the warning signals from the bond market has revived fears of a recession.
When an investor starts demanding a higher yield for short-term Treasuries, it generally means that the investor thinks it is riskier to hold such assets over the short-term. The inversion of the yield curve is therefore hard to ignore as it has a particular track record for preceding downturns. Earlier this month, the 2-Yr US government bonds dropped below the 10-Yr yields for the first time since the financial crisis while the 30-yr Treasury yield fell to a record low.
The inversion of the yield curve has deepened over the past few days. Tit-for-Tat Trade Tariffs It was another episode of tit-for-tat tariffs between the US and China. President Trump surprised the markets with a new round of tariffs at the beginning of the month.
China retaliated after three weeks. The global economy remains locked in a trade war between the world’s two largest economies with no sign of a concession any time soon. Yuan – The Symbolic Level Breached The Big Breach of the psychological level of 7 happened after President Trump announced the new round of tariffs, which prompted panic in the markets.
China was even labelled as a “currency manipulator”, and tensions between the two countries have worsened. The Yuan hit an 11-year low this week, and markets participants are left wondering how much further China would allow its currency to weaken. A currency war could be another ballgame for global markets.
Headwinds are piling up, providing little respite for investors. Brexit Drama Turned to a New Page New Prime Minister, Boris Johnson, is seeking to close Parliament next month and prompted a backlash from MPs and opponents of a no-deal Brexit. By announcing the proroguing of Parliament to limit the amount of time MPs would have to prevent a no-deal Brexit from happening, the PM sparked an undemocratic outrage.
We expect the weakness in the British Pound to build as the month winds down in anticipation of the Queen’s final decision to accept or deny the request. September will start with New Tariffs The U.S. Trade Representative’s office said in an official notice that collections of a 15% tariff will begin at 12:01 a.m.
EDT (0401 GMT) Sunday on a portion of the list covering over $125 billion of targeted goods from China. Unless there is a last-minute turnaround!
The Australian share market struggled to rise into positive territory on Monday. Sectors performance was mixed, with Information Technology, Energy and Real Estate leading gains of more than 0.5%, while significant losses were seen in the Consumer Discretionary and Communication Services sectors. Brambles Ltd, Regis Resources Limited and QBE Insurance were among the best performers of the ASX200 today, following the release of the earnings reports.
Brambles Limited (BXB) widely recognised as a leading sustainable logistics business rose by more than 4% to $13.18 on an upbeat profit outlook, despite a drop of 9% in the first half net profit. The company manages to deliver sales and earnings growth in the first half in a challenging economic environment. Sales growth +7% at the high end of the Group’s mid-single-digit revenue growth objective Underlying Profit +5% includes +3pt benefit from AASB 16; sales contribution to profit, efficiency gains and lower lumber and transport inflation offset higher operating costs and asset charges across the Group Net finance costs decreased 12% despite US$14m of lease interest recognised due to AASB 16.
The decrease reflected interest income from Australian dollar deposits and lower debt funded by IFCO sale proceeds Profit after tax (incl. discontinued operations) down (9)% due to inclusion of US$51.4m of IFCO earnings in 1H19. IFCO was divested in 2H19 Underlying effective tax rate decreased to 29.9% reflecting a change in mix of global earnings Underlying EPS of 17.8 US cents up 1.0 US cent reflecting higher earnings and 0.3 US cent benefit from the share buy-back Regis Resources Limited (RRL) reported a strong half-year net profit after tax of $93.4million. The Australian gold miner’s revenue was boosted by the sales price rather than quantity.
For the 2020 outlook, the Duketon operations continue to be on track to deliver the annual production guidance. Its share price ended more than 3% higher Record Net Profit of $93.4 million which represents a 17% increase in the prior corresponding period Revenue of $371.4 million with 182,807 ounces of gold sold at an average price of $2,063 per ounce EBITDA of $185.6 million with a strong EBITDA margin of 50% Cash flows from operating activities of $147.2 million A fully franked interim dividend of 8 cents per share declared Production on track to meet full-year guidance 340,000-370,000 oz QBE Insurance Group (QBE) announced an FY19 statutory net profit after tax of $550M, up 41% from $390M in the prior year. Its share price jumped by 4.24% to $14.75.
Adjusted net cash profit after tax was $733M, up 6% from $692M in the prior year Adjusted cash profit return on equity was 8.9%, up from 8.0%2 in the prior year Group-wide renewal rate increases averaged 6.3% compared with 5.0% in the prior year Premium rate momentum accelerated across all divisions over the course of FY19, especially in International (particularly Europe) and North America Group-wide renewal rate increases averaged 8.3%3,4 during 2H19 GWA Group Limited, the leading supplier of building fixtures and fittings to household and commercial premises performed strongly despite the struggling residential housing conditions. Tim Salt, the Managing Director highlighted the resilience of the business in the face of challenging market conditions. Net Profit of $23.6 million A fully-franked interim dividend of $0.08 per share 1HFY20 revenue of $206.3 million and EBIT of $37.5 million The Company’s share price rose by 2.05% to finish the day at $3.98 from $3.90.
Index Limited (IMD) share price traded in the red before lunch despite strong earnings reports. The mining tech company edged higher to close at 1.34% higher at $1.51. Strongest half-yearly revenue of $127.9m – up 2% on 1H19 ($125.0m) Underlying EBITDA of $28.1m1 – up 12% on 1H19 ($25.2m) A robust balance sheet with a strong net cash position of $25.5m2 – up 24% on 1H19 A fully-franked interim dividend of 1cps declared – up 25% on 1H19 (0.8cps) Bendigo and Adelaide Bank (BEN) issued its interim-results which a dividend cut and lower profits while announcing a $300 million capital raise and a trading halt.
Statutory net profit: $145.8 million, down 28.2 per cent, including a pre-tax software impairment of $87.1 million and accelerated amortisation of $19.0 million Cash earnings after tax: $215.4 million, down 2 per cent Net interest margin: 37 per cent, up 2 basis points (bps) This week will be the busiest week for February’s earnings. We will see more companies reporting on Wednesday and Thursday, respectively. Stay tune with GO Markets for more updates!
Today, Apple reported its First Quarter Results which was largely in-line with expectations, except for the iPhone revenue, which that fell slightly short of estimates. Quarterly revenue came at $84.3bn instead of $83.97bn forecasted. Compared to the year-ago quarter, it is a 5% decline. iPhone Revenue declined by 15% from the previous year.
It slightly missed estimates - $51.98bn vs $52.67bn expected. Other products and services grew by 19%. Mac and Wearables, Home and Accessories Revenue reached all-time highs and increased by 9% and 33% respectively.
It was one of the most awaited earnings for the week, not just because it belongs to the FAANG group, but also because Apple issued a rare revenue warning statement at the beginning of the year which exacerbated fears about future earnings and slow global growth. Apple stressed that China’s slowdown was the main driver behind the fall in revenue. Today’s results are therefore not considered to be horrible, probably because the markets expected much worse.
Tim Cook, Apple’s CEO mentioned that: “While it was disappointing to miss our revenue guidance, we manage Apple for the long term, and this quarter’s results demonstrate that the underlying strength of our business runs deep and wide.” It is the first quarter that Apple has reported its quarterly results under a new structure. We know that iPhone sales are decreasing and the company wanted to switch investors’ attention to the other most popular sectors that are growing. The new reporting structure offers the gross profit margin figures for its services and products segments while withholding unit sales numbers of products such as the iPhones.
Apple is providing the following guidance for its fiscal 2019 second quarter: Revenue between $55 billion and $59 billion Gross margin between 37 percent and 38 percent Operating expenses between $8.5 billion and $8.6 billion Other income/(expense) of $300 million Tax rate of approximately 17 percent The tech giant is navigating in a fast-moving industry amid foes such as Samsung, which explains why the fall iPhone sales spook investors. Tim Cook acknowledged that people are holding on their older iPhones longer than before and the change in reporting structure shows that there is a shift which investors need to monitor.
Apple Reports Third Quarter Results Apple announced its financial results for the June quarter after the closing bell on Tuesday. The Company reported revenue of $53.8 billion, which represents a 1% increase from the year-ago quarter. It is the first time in years that the iPhone revenue ($25.99bn) is less than half of Apple’s total revenue.
However, the strength of other Apple products has offset the weakness in the flagship product. “ This was our biggest June quarter ever — driven by all-time record revenue from Services, accelerating growth from Wearables, strong performance from iPad and Mac and significant improvement in iPhone trends,” said Tim Cook, Apple’s CEO. The iPhone business is struggling as consumers are upgrading less often which is prompting Apple to focus on its consumer services like iCloud, the App Store, Apple Music, Apple Pay for diversification and growth. Wearables like Apple Watch, AirPods, and Beats headphones are also products that are growing at an accelerating rate.
The CEO has the tough job of maintaining interest in Apple into the post-iPhone era. The popularity of iPhones is not the same as it used to be. In the last few years, the company reported its first iPhone sales drop and earlier this year, they issued a rare warning that the first-quarter earnings will be weaker than previously expected.
After reaching its peak in early 2018, its share price had been under pressure throughout 2018. After a strong recovery since the beginning of the year, the stock plunged throughout the month of May. Source: Bloomberg Terminal Its share price is close to recouping losses made in May.
After the release of the quarterly updates, Apple’s share price rose more than 4% in the after-hours trading. Apple is providing the following guidance for its fiscal 2019 fourth quarter: revenue between $61 billion and $64 billion gross margin between 37.5 per cent and 38.5 per cent operating expenses between $8.7 billion and $8.8 billion other income/(expense) of $200 million tax rate of approximately 16.5 per cent Click here for more information on trading Share CFDs, also, see our Index Trading page for information in trading Indicies.
Apple Inc. and Amazon.com, Inc The last two of the five most prominent technology companies, Apple Inc. (AAPL) and Amazon (AMZN), which form part of the FAANG group, have reported interesting quarterly earnings and highlighted their actions during this unprecedented uncertainty. Apple Inc. The company missed on earnings estimates but reported better-than-expected revenue: Earnings Per Share (adjusted): $2.55 (up by 4% from the year-ago quarter) Quarterly Revenue: $58.3B (up by 1% from the year-ago quarter) iPad, iPhone, and Mac all reported a decrease (year-on-year) of 10%, 7%, and 3%, respectively.
The shortfall was compensated by strong performance in the services and wearables category. The pandemic-induced environment has driven revenue for Services to an all-time high and a quarterly record for Wearables. Net sales by category: Three Months Ended March 28, 2020 $ (in millions) Three Months Ended March 30, 2020 $ (in millions) iPhone $28,962 $31,051 Mac 5,351 5,513 iPad 4,368 4,872 Wearables, Home and Accessories 6,284 5,129 Services 13,348 11,450 Total Net Sales $58,313 $58,015 The current crisis has made the stock cheaper, and as widely expected, the board has also authorised an increase to the existing share repurchase program despite the uncertain environment.
However, investors took note of an increase of only $50B compared to the forecasted amount of $75B-$100B. In the month of April, the company’s share price substantially pared the losses seen since February 2020. Its stock price rallied by more than 20% this month and is currently trading at $293.80.
After the release of the results, the company’s share price fell by around 2% in after-hours trading. Source: Bloomberg Amazon.com, Inc. Amazon, the leading e-commerce retailer, has also reported its first quarterly earnings after the bell on Thursday: Earnings Per Share (adjusted): $5.01 (down by 19% from the year-ago quarter) Quarterly Revenue: $75.45B (up by 26% from the year-ago quarter) While the founder and CEO provided an upbeat outlook of how Amazon has navigated through the current crisis with the availability and adaptability of different products from online shopping to Amazon Web Series to Prime Video and Fire TV, many investors focused on the company’s intentions to use Q2 operating profit for COVID-related expenses: “If you are a shareowner in Amazon, you may want to take a seat, because we’re not thinking small.
Under normal circumstances, in this coming Q2, we would expect to make some $4 billion or more in operating profit. But these are not normal circumstances. Instead, we expect to spend the entirety of that $4 billion, and perhaps a bit more, on COVID-related expenses getting products to customers and keeping employees safe.” The company’s share price rose by nearly 30% in April, pairing all the losses made towards the end of February and in March.
As of writing, the share is currently trading at $2,474. Source: Bloomberg After the release of the results, the company’s share price tumbled by around 5% in after-hours trading.
After a turbulent year for the technology giants, Amazon was crowned leader of the technology sector by market capitalisation on Monday. It has surpassed Microsoft to become the “ New King in Town ”. Technology stocks have been the primary driver of the global stock markets in the past decade.
The overall performance of the tech sector was outstanding since the financial crisis. However, 2018 has shown us that the tech giants are facing their own unique challenges and went into a freefall. In September 2018, Amazon reached the 1 Trillion Club (please link words to this article- https://www.gomarkets.com/au/review-of-year-2018/) just over a month after Apple reached the same milestone.
Since reaching this historic high, Amazon’s share price has dropped and dipped below the $700bn market cap in December 2018. Apple, Amazon, Google and Microsoft had been trading on a clear uptrend chart in the past decade, but 2018 took them all on a bumpy ride. The below charts depicts the performance of the four tech giants: 5-Years: The performance of these tech growth stocks has been impressive which explains why they were the favourite investments for the past decade. 1 -Year: Out of the four, only Amazon and Microsoft managed to stay in positive territory.
Year-to-date: Apple is the only one on the back foot despite more optimism in the air. Apple’s CEO issued a rare revenue warning that is undermining its recovery. What’s next for these tech stocks?
Volatility has been the dominating theme in 2018 and fears have hit stocks hard. After a painful end in 2018, it was a better start for stocks than anticipated. These stocks are expected to bounce back during the course of 2019.
However, investors will be more careful in their positionings as the strong confidence in the FAANG group has somewhat faltered.