The GDP figures are central to the Reserve Bank’s decision surrounding interest rates as the central bank is looking for evidence of a slowdown in the economy to bring inflation back to its target range of 2 to 3 per cent. It has left the cash rate at 4.35 per cent at the last two policy meetings, and its next meeting will be March 18 and 19.

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The laggards

Local tech stocks tracked the losses of their counterparts in the United States, where Wall Street had its worst result in three weeks on the back of a slump in big tech shares.

WiseTech fell 2.6 per cent, and TechnologyOne was down 2.4 per cent, placing them in the top two biggest mega-cap decliners. Fellow tech stock Xero slumped 0.9 per cent.

Seven Group Holdings fell 2.4 per cent, Lynas Rare Earths was down 2.4 per cent, and Treasury Wine Estates declined 2.4 per cent.

One of the biggest losers on the ASX on Wednesday morning was Cettire, an online fashion retailer whose shares sunk 14.4 per cent following reports in the Australian Financial Review that the company charged duties on goods but never paid them to the federal government. Cettire shares were trading as low as 3.5 at the open before ending the day at $3.99.

The lowdown

Capital senior financial market analyst Kyle Rodda said markets had shrugged off the GDP data because it had fallen in line with expectations and was “so backward-looking”. Investors also shrugged off the Super Tuesday elections in the United States.

“As far as the markets are concerned, Trump is the presumptive nominee, with only possible legal troubles standing in his way,” Rodda said in his note to investors. “President Biden is also cruising through the nomination process, with the markets eyeing Biden vs Trump II come November.”

In commodities news, gold touched an all-time high as fund buying, combined with speculation over a Federal Reserve pivot and geopolitical and financial risks, underpinned a rally in the precious metal.

Bullion rose as much as 1.3 per cent to $US2141.79 an ounce before paring gains, with Tuesday’s high topping the previous record of $US2135.39 set three months ago.

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Gold has risen more than 4 per cent since Thursday, fuelled by expectations for falling interest rates, geopolitical tensions and the risk of an equity markets pullback.

The scale of the move surprised some market watchers, particularly since there hasn’t been a significant change in expectations for the Fed’s easing pivot or other macroeconomic drivers during that time.

Iron ore fell 0.8 per cent to $US114.65 a tonne, and Brent crude was down 1.1 per cent to $US81.93 a barrel. The Australian dollar was trading at US65.18.

On Wall Street overnight, the S&P 500 slumped 1 per cent for its second straight loss after closing last week at an all-time high. The Dow Jones fell 1 per cent, and the Nasdaq composite led the market lower with a 1.7 per cent slide.

Apple’s drop of 2.8 per cent was one of the heaviest weights on the US market. It’s been struggling because of worries about sluggish iPhone sales in China, where tough competition and a faltering overall economy are challenging it.

Apple is one of several big tech stocks that’s bent recently under the weight of much higher expectations after running much higher in price. Since the start of last year, a select group known as the “Magnificent Seven” has been responsible for the vast majority of the S&P 500’s run to all-time highs.

Drops for several of them were among the heaviest weights on the S&P 500 Tuesday. Microsoft fell 3 per cent, Amazon slid 1.9 per cent, and Tesla dropped 3.9 per cent.

Piling into tech stocks has become one of the most popular moves on Wall Street among both mutual funds and hedge funds, according to strategists at Barclays Capital. That can raise the risk of sharp drops later when the momentum breaks, particularly with criticism rising that prices have gotten too expensive.

High-growth stocks have generally been rallying for several reasons, including a frenzy around artificial intelligence technology, but if they “fail to deliver on aggressive expectations, growth investors will likely wind up disappointed,” according to the asset allocation team at investment firm GMO.

MicroStrategy fell 21.2 per cent after it said it will raise $US600 million ($922 million) in debt, which it will use to buy more Bitcoin and for “general corporate purposes.”

Bitcoin briefly rose above $US69,000 on Tuesday, surpassing its record set in 2021, before pulling back below $US63,000. It’s been surging in part because of new exchange-traded funds that offer easier access for investors to the cryptocurrency. It roughly tripled over the last 12 months, but it’s notorious for huge swings in both directions that can happen painfully and suddenly.

The digital currency traded 7.88 per cent lower at $US63,406 as of 12.54pm AEDT on Bitstamp.

Target helped limit the US market’s losses after climbing 12 per cent. It reported a bigger jump in profit for the end of 2023 than analysts expected, as it held the line on some expenses.

New York Community Bancorp also rose 17.9 per cent to trim its loss for the week so far to 9.3 per cent. The bank is under pressure because of losses tied to investments it has related to commercial real estate. It’s also under heavier regulatory scrutiny because of its purchase of much of Signature Bank, one of the banks that fell in last year’s mini-crisis for the industry.

Hopes for coming cuts to interest rates got a boost after a report showed growth for US construction, health care and other services industries last month slowed by more than economists expected.

Perhaps more importantly for the market, the report also said prices paid by service businesses rose at a slower pace in February than in January. Meanwhile, a separate report said US factory orders weakened in January more than expected.

Wall Street’s hope has been that the economy will continue plugging along, but not at such a strong pace that it keeps upward pressure on inflation. That’s because traders want the Federal Reserve to cut interest rates this year, something it’s hinted it will do only if inflation cools decisively toward its 2 per cent target.

Following Tuesday’s reports, bets built among traders that the Federal Reserve will begin cutting interest rates in June. The Fed’s main rate is at its highest level since 2001 in hopes of grinding down inflation. Any cuts would relieve pressure on the economy and financial system.

Fed chair Jerome Powell will give testimony before Congress later this week, which could further sway expectations for when cuts to rates could begin.

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In the bond market, the yield on the 10-year Treasury fell to 4.13 per cent from 4.22 per cent late Monday.

In stock markets abroad, Hong Kong’s Hang Seng index sank 2.6 per cent. China’s premier said the country’s target for economic growth this year is around 5 per cent, in line with expectations. But the government’s intention to keep its deficit at 3 per cent, the size of China’s overall economy, may have disappointed investors hoping for more aggressive action.

Stocks in Shanghai inched up by 0.3 per cent, while indexes were modestly lower across much of the rest of the world.

Tweet of the day

Quote of the day

“It creates very much arbitrary lotteries, because they’re not very well targeted on who’s going to get the homes,” Grattan Institute economy policy program director Brendan Coates said of the Greens’ $12 billion housing policy.

“Twenty per cent [of homes] will be guaranteed for those on the lowest incomes, and the Parliamentary Budget Office assumes that the rest of it is distributed across the income quantiles, so there’s as much discounted housing made available to high-income earners as there is for low-income earners.”

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AP, Bloomberg