By Mike Dolan
LONDON (Reuters) – What matters in U.S. and global markets today
By Mike Dolan, Editor-At-Large, Finance and Markets
A mix of disappointing results from some major semiconductor chip names, a service sector hiccup and another slight ebb in hopes for interest rate cut have caused early week stock market ebullience go a bit flat.
In the thick of a mostly upbeat earnings season, Wall Street stocks ended in the red on Tuesday, dented in part by continued tariff tensions and the ISM’s survey showing a flat-lining of services activity last month. But index futures were back up marginally ahead of Wednesday’s bell.
* Chips stocks were side-swiped as Advanced Micro Devices reported disappointing data center revenue, a segment including artificial intelligence chips, causing shares in the California-based company to slump 4% overnight. Another AI darling, Super Micro, plunged 17% as it missed estimates in its battles with larger server makers. Better news for AI enthusiasts came from ChatGPT maker OpenAI, which is in early talks about a share sale that could value it at a whopping $500 billion.
* Despite the dour ISM services reading, Federal Reserve easing speculation declined slightly, with markets now only pricing in an 80% chance of a cut next month compared to essentially 100% at this time yesterday. President Donald Trump said on Tuesday he will decide on a nominee to fill a coming vacancy on the Fed’s Board by the end of the week and narrowed the possible replacements for Fed Chair Jerome Powell to a list of four.
* Meanwhile, the tariff saga continues, with new levies set to come into effect on Thursday. Trump also said sectoral tariffs on pharmaceuticals and semiconductors would be announced in the next week, with a small initial tariff on pharma imports eventually increasing to 250%. The U.S. standoff with India looks to be at an impasse, meantime, while Swiss President Karin Keller-Sutter was set to meet Secretary of State Marco Rubio on Wednesday to negotiate the severe 39% tariffs it faces.
In today’s column, I discuss why the Bank of England’s slow and shallow easing cycle has become the third-longest since World War Two.
Today’s Market Minute
* ChatGPT maker OpenAI is in early-stage discussions about a stock sale that would allow employees to cash out and could value the company at about $500 billion, a source familiar with the matter said.
* Since 2023, India has ramped up efforts to police the internet, including Elon Musk’s X. A Reuters investigation looks at the behind-the-scenes battle between the world’s richest person and authorities in the world’s most populous country.
