By Mike Dolan
LONDON (Reuters) – What matters in U.S. and global markets today
By Mike Dolan, Editor-At-Large, Finance and Markets
Sky-high expectations left Nvidia shares in the red overnight despite another earnings beat from the world’s most valuable company, as the market grumbled about slowing growth in core areas and ongoing geopolitical obstacles.
* The chip giant’s shares were down about 2% ahead of Thursday’s open. Doubts about the fate of Nvidia’s China business amid the U.S.-China trade war overshadowed the company’s outlook for a still whopping $54 billion of third quarter sales. The firm said its outlook assumed no shipments of its H20 chips to China despite having received some licenses to sell them. Ripples from the AI behemoth’s share price stumble were limited across the global chip sector, with Nvidia boss Jensen Huang saying the artificial intelligence spending boom was far from over. And S&P 500 futures remained steady after a record close for the index on Wednesday.
* Federal Reserve board governor Christopher Waller, tipped by many as President Donald Trump’s pick for the next Chair and advocate of immediate Fed rate cuts, is due to speak later today with intensifying political pressure on the central bank the main focus. With Fed futures pricing for a rate cut next month creeping back up toward 90%, two-year Treasury yields slipped further to four-month lows of 3.61% and two-year inflation-linked swaps closed in on 3% for the first time in three months. Yields across the curve fell back too after a reasonable 5-year note auction, with the dollar under renewed pressure as China’s offshore yuan surged to its highest levels of the year and Chinese stocks rallied.
* Elsewhere, what’s almost become an annual budget-related crisis for the French government – one that could see it collapse next month – smouldered but French and euro zone stocks rallied and 30-year French government debt yields fell back from Wednesday’s 13-year high. U.S. second-quarter GDP revisions and weekly jobless updates top the economic diary later, with more big retailers reporting earnings.
Today’s column looks at the Fed independence row and how Trump’s growing control of the central bank could result in a resumption of dollar weakness that the administration would likely welcome.
Today’s Market Minute
* Nvidia (NVDA.O) shares dipped on Wednesday as the fate of its China business hung in the balance, caught up in the trade war between Washington and Beijing.
* The U.S. government’s new stake in Intel (INTC.O) is making some investors nervous that President Donald Trump’s deal heralds an era of government meddling in private industry, particularly as the arrangement followed Trump’s call for the resignation of the computer chip maker’s CEO.
