NZX Set For Firmer Start As Wall Street Pushes Higher

Moomoo Australia and New Zealand | market commentary by Greg Boland

With all three major US indexes up around 0.7% with one hour until the closing bell, the NZX 50 looks set for a firmer start after three straight losing sessions. Lower volatility, stronger market breadth and renewed buying in technology should support local sentiment at the open.

Wall Street is pushing higher across the board, with the Dow back above 50,000, the S&P 500 trading near 7,500 and the Nasdaq up 0.8%. Market internals remain supportive, with 317 stocks advancing versus 185 declining in the S&P 500, while the VIX has dropped back to 17.5, its lowest level this week. Communication services, technology and consumer stocks are leading the move, suggesting investors are once again comfortable leaning into growth despite ongoing inflation concerns.

Technology is again at the centre of the rally. Cisco Systems has surged nearly 13% after stronger-than-expected earnings, upbeat guidance and productivity measures that include workforce reductions. NVIDIA is also up more than 4%, continuing its recent breakout as investors position ahead of its highly anticipated earnings report on 20 May. Semiconductor sentiment remains constructive, which could support New Zealand growth names with global technology exposure.

Economic data was also supportive overnight. US retail sales rose 0.5% in April, in line with expectations, showing the American consumer remains resilient despite higher fuel prices and persistent inflation pressures. Oil is still elevated near US$97 a barrel as markets monitor the Middle East and ongoing talks between President Trump and President Xi in China, with investors watching for any signs of easing trade or semiconductor restrictions.

Back home, the NZX 50 fell 0.3% yesterday, dragged lower by Air New Zealand after warning of rising fuel costs and its biggest loss outlook in four years. The a2 Milk Company, Mainfreight and other exporters also came under pressure, while Infratil and local tech names remained soft.

Local attention today should focus on Infratil, Vista Group International and Gentrack Group after the strong US tech lead, while exporters and airlines remain sensitive to oil prices and China-related headlines. If Wall Street closes near session highs, Kiwi investors may finally see buyers return to growth and infrastructure names today.

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