Utilities (up 0.4 per cent) were among the strongest companies, with Mercury NZ climbing 1.1 per cent and Meridian Energy adding 0.7 per cent.

Gold companies were also among the biggest megacap winners, with Evolution Mining gaining 3 per cent the company reported its June quarter gold production rose 14 per cent, and it also posted record quarterly cash flow. Newmont shares rose 0.6 per cent.

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Shares in Accent Group, which operates footwear chains such as Hype and Platypus, jumped 11.5 per cent after the company revealed it will close almost half of its Glue youth fashion stores because they are underperforming.

On Wall Street, a report that the Biden administration was considering severe trade restrictions as part of a chip clampdown against China weighed on chipmakers, sending the Philadelphia Semiconductor Index spiralling 6.8 per cent lower and sparking the worst day for the Nasdaq in almost two years.

Shares in US chip powerhouses Nvidia, Advanced Micro Devices and Broadcom all declined. In Europe, ASML Holding tumbled over 10 per cent even after the Dutch giant reported strong orders. Those moves followed a plunge in Tokyo Electron, which led a slide in Japan’s Nikkei 225 Stock Average.

The S&P 500 Index fell 1.4 per cent and the Nasdaq Composite Index lost 2.8 per cent. The Dow Jones Industrial Average climbed for a sixth straight day, closing up 0.6 per cent at another record.

With firms such as Apple and Microsoft each making up 7 per cent of the S&P 500, losses are difficult to offset, even when most of the index’s constituents are up – as they were overnight.

A gauge of the “Magnificent Seven” companies, which include the likes of Amazon, Apple, Nvidia and Microsoft, slipped 3.4 per cent. Wall Street’s “fear gauge” – the VIX – spiked toward its highest level since early May.

“Much of this year’s equity gains have come from a handful of [tech] names currently under direct threat from the political arena,” said Jose Torres at Interactive Brokers. “An important question is if the rest of the market, which generally lacks thrilling tales on a relative basis, can offset the waning momentum in ‘magnificent seven’ stocks.”

The bond market saw small moves. The Federal Reserve’s beige book showed slight economic growth and cooling inflation. The most notable Fed speaker overnight was governor Christopher Waller, who said the US central bank was getting “closer” to cutting rates but was not there yet.

with Bloomberg/Reuters

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