Australian shares are likely to open lower following a slide on Wall Street, having risen 0.8% yesterday.
US sharemarkets slipped on Tuesday as declines in semiconductor and energy stocks outweighed positive earnings results from major banks.
At the close, the Dow Jones index fell by 325 points, or 0.8%, while the S&P 500 also dipped 0.8%.
Chips restrictions spook Nvidia
But the Nasdaq led the decline, shedding 187 points or 1% as chip stocks were hit hard. Nvidia tumbled 4.5% following reports the government might introduce restrictions on AI-chip exports.
ASML (AS:ASML) Holdings added to the tech sector's woes, as the chip equipment maker's downbeat 2025 sales forecast triggered a 16.3% drop in its US-listed shares, contributing to a 5.3% loss in the semiconductor index.
Energy stocks also slumped 3% amid falling crude prices, driven by a weaker demand outlook.
On the earnings front, UnitedHealth (NYSE:UNH) slid 8.1% after forecasting 2025 profit below expectations, while Bank of America (NYSE:BAC) gained 0.6% on a better-than-expected third-quarter result.
Charles Schwab (NYSE:SCHW) saw a notable 6.1% jump after exceeding estimates, and Walgreens Boots Alliance (NASDAQ:WBA) soared 15.8% following a strong fourth-quarter profit.
Australian household spending down
Back home, the Commonwealth Bank of Australia (ASX:CBA) has reported a 0.7% decline in household spending in September, despite increased spending surrounding AFL and NRL finals.
According to the bank's Household Spending Insights (HSI) index, which is based on CBA customer transactions and lending data, the dip was driven by reduced expenditure on hospitality, transport, household items and food and drink.
The decline was partially offset by a surge in recreation spending, mainly due to ticket purchases for the football finals.
CBA chief economist Stephen Halmarick noted that while tax cuts had increased take-home pay, the extra income was largely being used for essential spending and debt repayment rather than discretionary items.
"It's important to note that the only other spending categories to rise in September were all essentials," Halmarick said.
The report also highlighted a significant slowdown in spending growth on an annual basis, falling to 2.1% in the year to September, down from 3.7% in August.
It revealed a spending divide based on home ownership status. Renters have pulled back on spending, while those who own their homes outright have increased their expenditure.
"This breakdown emphasises the challenging environment for those who rent and those who have a mortgage, relative to those who own their home outright," the report concluded.
In Europe, sharemarkets experienced their sharpest one-day drop in over two weeks, as ASML’s results also weighed on technology stocks, driving the sector down 6.5%.
The FTSEurofirst 300 index fell 0.9%, while the UK FTSE 100 slipped 0.5%.
Currencies and commodities
In the currency markets, the Euro fell from US$1.0915 to US$1.0882 and was near US$1.0890 at the US close.
The Australian dollar slid from US$0.6724 to US$0.6697 and was near US$0.6700 at the US close.
The Yen strengthened from 149.66 to 148.85 per US dollar and was near 149.20 at the close.
Energy stocks lost 3.3% amid plunging oil prices, as Brent crude dropped 4.1% to US$74.25 a barrel, and US Nymex crude fell 4.4% to US$70.58.
Gold prices rose 0.5% to US$2,678.90 per ounce, while base metals, including copper and aluminium, saw declines.
Iron ore futures also slipped 0.4% on the back of softer global demand.