Meanwhile, shares in biotech darling Telix Pharmaceuticals fell 2.5 per cent after the company completed its $650 million capital raising through the issue of convertible notes at an initial conversion price of $24.78 per share.

In aviation news, Rex Airlines’ shares remain in a trading halt amid speculation that EY Australia would be appointed as administrator to review the financial health of the nation’s third-largest airline. Rex on Tuesday stopped offering tickets on its Boeing 737 intercity routes, although regional fares remain available.

US investors will be keeping a close eye on the latest numbers from a number of technology heavyweights, with Microsoft, Facebook and Instagram’s owner Meta, Apple and Amazon to report their earnings.

Meanwhile, the US Federal Reserve will this week provide its latest indication on where interest rates in the US are headed. Australia’s Reserve Bank is expected to keep rates steady at its next meeting, but investors will be keen to hear from US fed chief Jerome Powell on how the US central bank is balancing the risks of cutting rates too soon and keeping them on hold for too long.

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Rate decisions in Japan and the UK will also be closely watched – the former for a hike, the latter for a cut.

“The Fed and tech earnings will have the spotlight for the week,” said Paul Nolte at Murphy & Sylvest Wealth Management. “The future direction of interest rates should be clearer after the press conference. Big tech can also answer whether investors’ expectations for still high growth rates is warranted.”

ON Semiconductor helped support the US sharemarket as its shares jumped of 11.5 per cent after the supplier to the auto and other industries reported stronger profit for the spring than analysts expected.

The S&P 500 Index rose 0.1 per while the Dow Jones Industrial Average lost 0.1 per cent. The Nasdaq Composite Index was also relatively flat.

McDonald’s shares rose 3.7 per cent despite reporting profit and revenue for the latest quarter that fell short of forecasts. Analysts said its performance at US restaurants wasn’t as bad as some investors had feared.

The gains helped offset slides in the shares of oil and gas companies, which were some of the heaviest weights on the market after the price of oil sank toward where it was two months ago. ConocoPhillips lost 1.6 per cent, and ExxonMobil fell 1 per cent, amid worries about how much crude China’s faltering economy will burn.

July’s wild ride in stocks underscored how betting on seven large tech companies is no longer a simple, slam-dunk trade. During most of the month, investors jumped into other corners of the market on speculation Fed cuts will further boost Corporate America. Still, the S&P 500 ended up suffering two straight weeks of losses, dragged down by its most influential group – technology.

“It’s almost impossible to know if the worst of the recent market pullback is over, but we continue to believe the equity market backdrop is favourable due to resilient growth, falling inflation, likely Fed rate cuts, and AI spending,” said David Lefkowitz at UBS Global Wealth Management.

Whether or not the Fed cuts rates in September, the foundations of a broad stock rally seem to be coming into place in anticipation of it, according to John Stoltzfus at Oppenheimer Asset Management.

“The dominance of a few tech names this year appears not so much about California Dreamin’ or irrational exuberance – rather is reminiscent of the old adage that the technology genie once let out never goes back into its bottle – but rather morphs into new developments and trends,” he noted.

With AP and Bloomberg

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