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Coal miners were also in the red, with Yancoal (down 3.4 per cent) and Whitehaven (down 2.7 per cent) among the biggest large-cap decliners.

While NEXTDC (up 2.7 per cent) climbed, other tech players including WiseTech (down 0.4 per cent), Xero (down 0.9 per cent) and TechnologyOne (down 1.9 per cent) dropped.

The lowdown

Morgans investment advisor Jack Stickley said gains on the ASX on Monday were broad-based after the US reached a deal to lift the debt ceiling over the weekend.

Most sectors except coal advanced, Stickley said, after a period of relative strength. “Coal companies had a pretty big run earlier in the year, but we are starting to see a slowdown,” he said. “The high-level cause could be softer data coming out of China.”

Stickley said financials companies benefited from the deal struck over the debt ceiling. “After the debt ceiling news market confidence provided some relief for local banks,” he said, adding the news was a circuit breaker after markets had been trading range bound for the past six weeks or so.

Consumer discretionary companies, meanwhile, could be trading softer because of downgrades from firms such as Universal and broader spending redistribution. “Travel is opening up again so some of that consumer spending might be redirected to travel,” Stickley said.

Elsewhere, technology stocks powered solid gains for Wall Street last week after another chipmaker reported strong demand related to artificial intelligence, while an in-principle deal has been reached in the US to raise the debt ceiling and avert a default.

The S&P 500 rose by 1.3 per cent, the Dow Jones added 1 per cent and the tech-heavy Nasdaq jumped by 2.2 per cent.

The upbeat finish to the week for major indexes came before the announcement on Sunday AEST, that a deal had been reached to lift the US government’s debt ceiling and avert a potentially calamitous default.

President Joe Biden and House Speaker Kevin McCarthy were finalising a deal to raise the nation’s debt ceiling while trying to ensure enough Republican and Democratic votes to pass the measure in the coming week.

On Wall Street on Friday, Marvell Technology surged a record-setting 32.4 per cent after the chipmaker said it expects AI revenue in fiscal 2024 to at least double from the prior year. That follows Thursday’s report from fellow chipmaker Nvidia, which gave a big forecast for upcoming sales related to AI.

The revolutionary AI field has become a hot issue. Critics warn that it is a potential bubble, but supporters say it could be the latest revolution to reshape the global economy.

“Should we avoid that, and it appears that is a high probability, we come back to a trajectory of a slowing economy, still-too-high inflation and restrictive monetary policy,” said Bill Northey, senior investment director at US Bank Wealth Management.

A key measure of inflation that is closely watched by the Federal Reserve ticked higher than economists expected in April.

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The persistent pressure from inflation complicates the Fed’s fight against high prices. The central bank has been aggressively raising interest rates since 2022, but recently signalled it would likely forgo a rate hike when it meets in mid-June. The latest government report on inflation is raising concerns about the Fed’s next move.

Wall Street is now leaning slightly toward the potential for another quarter-point rate hike in June, according to CME’s Fedwatch tool. The Fed has already raised its benchmark interest rate 10 times in a row.

The latest US inflation data has also highlighted the continued resilience of consumer spending, which has been a key bulwark, along with the strong jobs market, against a recession. The US economy grew at a sluggish 1.3 per cent annual rate from January through March and it is projected to accelerate to a 2 per cent pace in the current April-June quarter.

On Friday, markets were heading into a long weekend and will be closed in the US for the Memorial Day holiday on Monday.

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Quote of the day

“I’d like to apologise to the customers we’ve let down. We haven’t been up to scratch, and we admit that,” said Jetstar chief executive Stephanie Tully, issuing another apology to customers whose travel has been disrupted by ongoing performance delays at the airline.

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With AP