(Bloomberg) — European and US equity futures declined after Nvidia Corp.’s outlook failed to meet the loftiest expectations, taking the wind out of a global AI rally.
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Contracts for the Euro Stoxx 50 fell 0.2% while futures on the Nasdaq 100 Index were down 0.5%. An Asian equity benchmark slipped 0.2%, with chipmakers Taiwan Semiconductor Manufacturing Co. and SK Hynix Inc. among the heaviest drags. Nvidia slumped more than 8% in post-market trading.
Nvidia’s underwhelming sales forecast threatens to cool the AI frenzy that has powered global tech stocks for much of this year. Once this all-important earnings have been digested, investor focus may shift to a string of US data including personal consumption and weekly jobless claims due later Thursday to firm up bets on how quickly the Federal Reserve will ease this year.
“Expectations were really high, sooner or later this was going to happen,” Joshua Crabb, head of Asia Pacific equities at Robeco Hong Kong Ltd., said of Nvidia results. “The AI proxies will have a tougher day.”
Treasury 10-year yields steadied after rising one basis point to 3.84% in the previous session. The dollar edged lower after gaining broadly amid speculation investors were buying the US currency for portfolio re-balancing.
Investors are weighing US interest rate cut prospects as Fed Bank of Atlanta President Raphael Bostic said it “may be time to cut” but he’s still looking for additional data to support lowering interest rates next month.
The New Zealand dollar strengthened after the country’s business confidence jumped to a 10-year high. In Japan, a sale of two-year sovereign notes saw the highest bid-cover ratio since 2019 after a recent increase in yields attracted investors.
In China, a run of glum earnings continued. Shares of EV maker Li Auto Inc. slumped as much as 15% after missing estimates. Peer BYD Co. also fell despite delivering a 33% jump in profit. Adding to the sour mood, UBS Group AG downgraded its forecast for China’s growth for this year and the next, citing a deeper-than-expected property market slump.
While Nvidia’s guidance underwhelmed, revenue more than doubled to $30 billion in the fiscal second quarter, which ended July 28. And the Santa Clara, California-based company’s board approved an additional $50 billion in stock buybacks.
In commodities, oil steadied after a two-day drop, with stock market losses offsetting a drawdown in US stockpiles and supply disruptions in Libya. Gold traded just below its record high, on course for a monthly gain.
Key events this week:
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Eurozone consumer confidence, Thursday
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US GDP, initial jobless claims, Thursday
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Fed’s Raphael Bostic speaks, Thursday
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Japan unemployment, Tokyo CPI, industrial production, retail sales, Friday
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Eurozone CPI, unemployment, Friday
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US personal income, spending, PCE; consumer sentiment, Friday
Some of the main moves in markets:
Stocks
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S&P 500 futures fell 0.2% as of 6:50 a.m. London time
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Nikkei 225 futures (OSE) fell 0.1%
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Japan’s Topix was little changed
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Australia’s S&P/ASX 200 fell 0.3%
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Hong Kong’s Hang Seng fell 0.1%
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The Shanghai Composite fell 0.4%
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Euro Stoxx 50 futures fell 0.2%
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Nasdaq 100 futures fell 0.5%
Currencies
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The Bloomberg Dollar Spot Index fell 0.1%
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The euro rose 0.1% to $1.1135
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The Japanese yen was little changed at 144.68 per dollar
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The offshore yuan rose 0.3% to 7.1112 per dollar
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The Australian dollar rose 0.3% to $0.6802
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The British pound rose 0.2% to $1.3213
Cryptocurrencies
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Bitcoin rose 0.2% to $59,450.99
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Ether was little changed at $2,540.3
Bonds
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The yield on 10-year Treasuries was little changed at 3.83%
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Japan’s 10-year yield was unchanged at 0.890%
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Australia’s 10-year yield advanced two basis points to 3.95%
Commodities
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West Texas Intermediate crude rose 0.2% to $74.69 a barrel
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Spot gold rose 0.5% to $2,517.76 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Matthew Burgess, Kurt Schussler and Abhishek Vishnoi.
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