Mercury NZ (down 3 per cent), Paladin Energy (down 2.7 per cent) and Insurance Australia Group (down 1.6 per cent) were among the worst-performing large-cap stocks.

Overnight on Wall Street, US stocks held steady following some sharp recent gains.

The S&P 500 Index edged up 0.1 per cent in a relatively quiet trading session following three straight leaps for the benchmark of at least 0.9 per cent. The Dow Jones Industrial Average also added 0.1 per cent, while the technology-heavy Nasdaq Composite Index slipped 0.1 per cent.

Shares in Kenvue – the company whose brands include Band-Aid and Tylenol – rose 6.4 per cent after it topped analysts’ forecasts for both profit and revenue in its latest quarter.

Disney sank 9.5 per cent despite reporting stronger quarterly results than analysts expected. However, its revenue fell short of forecasts, and it provided guidance that its entertainment streaming business may soften in the current quarter.

The US earnings season is winding down, with the majority of companies beating forecasts for earnings, but they are not getting as big a boost to their stock prices afterwards as they usually do, according to FactSet.

Companies that fall short of profit expectations also have seen their stock prices sink by more the following day than they have historically. That could suggest investors are beginning to listen to critics who have been calling the US equity market broadly too expensive following its record run this year. For stock prices to climb further, profits would either need to grow substantially, or interest rates would need to fall, they say.

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Wall Street still considers rate decreases a possibility this year following some events last week that traders found encouraging.

Federal Reserve chair Jerome Powell said the central bank remains closer to cutting its main interest rate than lifting it despite a string of stubbornly high recent readings on inflation. A cooler-than-expected jobs report on Friday also suggested the US economy could pull off the balancing act of staying solid enough to avoid a recession without being so strong that it keeps inflation too high.

Treasury bond yields have been regressing this month to offer some competitive relief for the equity market.

The yield on the 10-year Treasury fell to 4.45 per cent, from 4.49 per cent a day earlier. The two-year yield, which moves more closely with expectations for the Fed, slipped to 4.82 per cent, from 4.83 per cent.

With AP

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