ASX set to climb as Wall Street rises; Anthropic’s loss revealed

The US stock market mostly rose following strong profit reports from Equifax, Hasbro and other companies, while oil prices eased back after nearing their highest levels since the war with Iran began.

The S&P 500 added 0.3 per cent. The Dow Jones Industrial Average rose 1 per cent, while drops for several big technology stocks including Apple and Meta Platforms weighed on the Nasdaq composite, which ended down less than 0.1 per cent.

The Australian sharemarket is set to advance, with futures at 6.45am AEDT pointing to a rise of 32 points, or 0.4 per cent, at the open., The ASX lost 0.3 per cent on Tuesday. The Australian dollar was trading higher at US70.03¢.

Elon Musk said SpaceX and Tesla have formed special committees to explore a potential merger, a preliminary step toward what would rank as the largest corporate tie-up of all time.

“I do think there’s a lot of merit to combining the companies,” Musk, the chief executive officer of both companies, said on SpaceX’s earnings webcast. “There’s a lot to be gained from cooperating on developing superintelligence software.”

SpaceX reported after the closing bell, posting a 161 per cent rise in revenue for the third quarter, beating estimates, buoyed by a surge in its AI business and steady growth at its Starlink satellite-internet unit. Revenue in the third quarter stood at $US14.58 billion ($20.8 billion), compared with analysts’ estimate of $US12.72 billion, according to data compiled by LSEG.

Meanwhile, AI startup Anthropic recorded a net loss of more than $US80 billion in the first half of this year, including $US72 billion in accounting charges, the Wall Street Journal reported on Tuesday, citing a draft initial public offering prospectus.

Stock prices tend to follow the path of corporate profits over the long term, and several companies delivered results for the latest quarter that were better than analysts expected. Big expectations for growth generally are what have allowed the US stock market to hit records recently despite worries about high inflation, higher interest rates and other challenges weighing on Wall Street.

Equifax rallied 11.3 per cent for one of the market’s biggest gains after reporting a bigger profit for the summer than analysts expected, despite high mortgage rates slowing some parts of its business.

Hasbro climbed 11.2 per cent after the toy company said its Magic: The Gathering game made more than $US600 million ($857 million) during a quarter for the first time. 3M rose 5.8 per cent after the company behind Ace bandages and Scotch-Brite sponges likewise reported a stronger-than-expected profit, even as shoppers broadly feel discouraged by high inflation.

Stocks also got a lift after the price for a barrel of Brent crude erased an early gain to fall 0.8 per cent to $US108.70. Earlier in the morning, it got near $US112 and approached its highest price since the war with Iran began in late February.

The drop in oil prices will relieve some of the pressure on inflation, if it lasts.