ASX set to open higher ahead of inflation report; Wall Street gains again

The gains for indexes masked some big swings underneath the surface, particularly among stocks linked to the artificial-intelligence industry.

A report that Meta Platforms is in talks to use Google’s chips sent shares of its parent Alphabet soaring. The stock was up 1.3 per cent after jumping as much as 3.2 per cent, putting it on track to hit a $US4 trillion market capitalisation for the first time. Alphabet has added nearly $US1 trillion ($1.55 trillion) in market value since mid-October, helped by Warren Buffett taking a $US4.9 billion stake during the third quarter and broader Wall Street enthusiasm for its recently released Gemini AI model.

Rival chip companies dropped sharply after the report. Nvidia sank 3.9 per cent and was the heaviest weight on the S&P 500 by far, while Advanced Micro Devices dropped 6.9 per cent.

Chinese e-commerce giant Alibaba, meanwhile, saw its stock that trades in the United States fall 2.1 per cent after losing an early gain. It reported stronger revenue than analysts expected for the latest quarter thanks in part to the AI boom, but its overall profit fell short of forecasts.