On the flipside, Mercury NZ tumbled 6.04 per cent, followed by Resmed (down 3.29 per cent) and Evolution Mining (down 3 per cent). Healthcare (down 0.31 per cent) was the only sector trading in the red at midday.

On Wall Street overnight, the US sharemarket suffered its longest losing streak since January as a handful of big techs sold off — despite a slide in bond yields. The S&P 500 fell 0.6 per cent, extending a drop from its all-time high to more than 4 per cent. Chipmakers bore the brunt of the selling after ASML Holding’s orders tumbled. AI chip giant Nvidia led losses in megacaps.

The Nasdaq 100 dropped 1.2 per cent and the Dow Jones Industrial Average slipped 0.1 per cent.

After a 10 per cent stock rally in the first quarter — the strongest start to a year since 2019 — investors on Wall Street have been increasingly sceptical about how much further the market could go over the near term, even accounting for the continued strength in the US economy.

Just a day after Jerome Powell threw cold water on rate-cut bets, dip buyers emerged in the Treasury market, with two-year yields dropping further below 5 per cent and $US13 billion sale of 20-year bonds drawing solid demand. The yield on 10-year Treasuries declined eight basis points to 4.59 per cent.

Powell signalled on Tuesday that policymakers would wait longer than previously anticipated to cut interest rates following a series of surprisingly high inflation readings. Fed officials narrowly pencilled in three cuts in forecasts published last month — but investors are now betting on just one to two this year, futures markets show.

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“Fed Chair Powell was downright hawkish,” said Win Thin and Elias Haddad at Brown Brothers Harriman. “The Fed wants the market to do the tightening for them. Financial conditions remain too loose and so some combination of higher yields, wider spreads, stronger dollar, and lower equities is needed to tighten conditions.”

Shares of Donald Trump’s Trump Media & Technology Group soared to recoup a sliver of the billions in market value it shed in the three weeks since its debut as a public company. United Airlines surged after the carrier forecast better-than-expected profit this quarter, tempering concerns that Boeing aircraft delays and regulatory pressure would put expansion plans at risk.

Meanwhile, President Joe Biden vowed to keep United States Steel Corp American-owned and called for higher tariffs on Chinese steel and aluminum as he sought to woo union workers ahead of November’s election.

While global equities are facing tactical headwinds, this is just a consolidation phase and stocks are expected to keep rising this year, according to UBS strategists led by Andrew Garthwaite.

They noted positive developments including artificial intelligence pushing productivity and earnings higher, lower warranted equity risk premium, likely falling labour costs and fewer worries on margin pressures.

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The equity risk premium for US equities — a measure of the differential between stocks and bonds’ expected returns — is now deep in negative territory, something that hasn’t happened since early 2000s.

While this is not necessarily a negative indicator for the sharemarket, it all depends on the economic cycle. The lower ERP can be seen as a promise of a future boost in corporate profits, but also that a bubble is in the making.

Fundamentals and technical trends for equity markets still appear supportive, suggesting the recent pullback should prove temporary, according to HSBC strategists led by Max Kettner, who are using the decline to add to their bullish stance.

US corporate earnings are set for a “healthier runway” through 2024 and investors are growing more confident that companies can meet expectations, according to Morgan Stanley strategists.

The market is watching for profits to bottom in the first quarter before sequentially recovering in the second quarter and eventually expanding in the back half of the year, they wrote.

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