Shares in embattled pathology group Healius rallied 14.7 per cent after it appointed Paul Anderson to take over as chief executive from Maxine Jaquet, and launched a strategic review.

The laggards

Lithium miners were among the weakest on the index as IGO lost 5.3 per cent and Pilbara Minerals fell 7 per cent.

Utilities (down 0.9 per cent) was one of the weakest sectors with Mercury NZ shedding 4.3 per cent and Meridian Energy dropping 2.4 per cent.

Consumer discretionary stocks (down 1.2 per cent) and consumer staples (down 1.1 per cent) were also weaker, as Wesfarmers slipped 1.8 per cent and supermarket giants Coles (down 3.3 per cent) and Woolworths (down 0.3 per cent) moved lower.

The lowdown

Novus Capital senior client adviser Gary Glover said gold stocks were a key driver for the Australian sharemarket on Tuesday.

“There were some decent moves from gold stocks with the gold price looks pretty bullish,” he said, noting gold prices, which tend to perform better in high-inflation environments, were probably catching up after a passive sell-off in the past few weeks.

Overnight, US stocks edged down from their record heights in a quiet Monday on Wall Street.

The S&P 500 slipped 0.1 per cent, coming off its latest all-time high and its 16th winning week in the past 18. The Dow Jones dipped 0.2 per cent and the Nasdaq composite lost 0.4 per cent.

Momentum slowed for US stocks following their roar higher on excitement that inflation appears to be cooling, cuts to interest rates may be coming and the US economy has so far shrugged off predictions for a recession. At the same time, a frenzy around artificial intelligence technology has catapulted some stocks to stratospheric heights.

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Super Micro Computer, which sells server and storage systems used in AI and other computing, jumped another 18.6 per cent on Monday. It has surged nearly 1000 per cent in the past 12 months.

It was the first trading for the stock since an announcement that it will join the S&P 500 index of the biggest US stocks in two weeks. Such a move could drive even more investment in the company.

Super Micro Computer will replace Whirlpool, which is on track for a third straight losing year and will fall back to the S&P 400 index of mid-sized stocks. At the same time, Deckers Outdoor will replace Zion Bancorp in the S&P 500.

The poster child of AI mania is Nvidia, whose chips are powering much of the move into AI. It rose another 3.6 per cent on Monday to bring its gain for the year so far to 72.1 per cent after more than tripling in 2023. It was by far the strongest force pushing upward on the S&P 500.

Such spurts are bolstered by a surge in profits and expectations for tremendous growth to continue. But they are also raising worries about another potential bubble as prices whiz at breathtaking speeds.

The market is “euphoric on AI”, according to Savita Subramanian, an equity strategist at the Bank of America. That can be a concerning signal because too much excitement can push prices too high, leading to disappointment later.

“Bull markets end with euphoria,” Subramanian said in a Bank of America global research report. But the euphoria so far appears to be concentrated in just AI and other select areas, and she raised her target for where the S&P 500 could end this year, to 5400 from 5000.

Several events scheduled for this week could upset the market.

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On Wednesday, the chair of the Federal Reserve will give evidence before a House of Representatives committee about monetary policy. Wall Street’s hope has been that inflation is cooling enough for the Fed to cut its main interest rate from its highest level since 2001, which would relieve pressure on the economy and financial markets.

A report on Friday will show how the US job market is doing, with economists forecasting a slowdown from January’s strong growth. Resiliency there has kept the US economy out of recession, which in turn should drive profits for companies and support stock prices.

Elsewhere on Wall Street, Spirit Airlines lost 10.8 per cent. JetBlue Airways is ending its proposed $US3.8 billion combination after a court ruling blocked the merger. JetBlue rose 4.3 per cent.

Apple fell 2.5 per cent after the European Union hit it with a fine of nearly $US2 billion for unfairly favouring its own music streaming service over Spotify and other rivals. It was the single heaviest weight on the S&P 500.

Gains were plentiful in other markets. Bitcoin rose above $US67,000 to climb closer to its record of nearly $US69,000. Gold also rose, setting a record. An ounce for delivery in April settled at $US2126.30. In the bond market, the yield on the 10-year Treasury rose to 4.21 per cent from 4.18 per cent late on Friday.

Elsewhere in Asia, the spotlight this week is on China’s National People’s Congress, the country’s most important political event. It opens on Tuesday and could offer updates on policies to support the slowing economy, resolve troubles in the property market and stabilise financial markets.

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“Our network monitoring suggests that some customers are potentially hitting their maximum speed on a regular basis,” said NBN Co chief customer officer Anna Perrin as broadband speeds are set to skyrocket for about 9 million Australians.

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With AP