Japanese and South Korean stocks turned slightly higher after earlier losses, with mild gains in Australia. Hong Kong futures pointed to a weak opening, while contracts for US peers were steady after some of the world’s largest tech names pushed US stocks lower.
A gauge of the “Magnificent Seven” megacaps slid 1.2% on Monday. While more than half of the shares in the S&P 500 gained, the US equity benchmark edged lower — a consequence of weakness in the tech giants that dominate it.
Treasury 10-year yields rose two basis points to 3.82% on Monday, while the dollar strengthened as markets monitored the extent to which the Fed likely to cut interest rates next month.
Expectations heading into Nvidia’s earnings on Wednesday are high, with analysts anticipating another strong consensus beat that could prompt the chipmaker to raise its profit guidance. The results may provide further clarity on artificial intelligence demand, with Nvidia being the direct beneficiary of the intense spending by companies building out AI infrastructure.“Move over Powell – it’s Jensen Huang’s turn to move markets,” said Anthony Saglimbene at Ameriprise, referring to Nvidia’s chief. “In our view, Nvidia’s earnings report this week may actually have more impact on the overall market than Powell’s Jackson Hole speech last week.”
BloombergChinese consumers returned to the spotlight after PDD Holdings Inc.’s shares fell the most since 2022 in New York. A warning of slow sales by Temu’s owner was the latest disappointment from the sector, where the country’s biggest consumer companies have reported revenue misses.Also in China, the government urged Canada to immediately correct the “wrong practices” of new tariffs against the Asian nation. Canada, an export-driven economy that relies heavily on trade with the US, has been closely watching moves by the Biden administration to erect a much higher tariff wall against Chinese EVs, batteries, solar cells, steel and other products.
US inflation figures this week will likely reinforce that long-awaited rate cuts are coming soon, while a reading on consumer spending is seen indicating that the central bank has been successful at keeping the expansion intact.
Economists see the personal consumption expenditures price index excluding food and energy — the Fed’s preferred measure of underlying inflation — rising 0.2% in July for a second month. That would pull the three-month annualized rate of so-called core inflation down to 2.1%, a smidgen above the central bank’s 2% goal.
Fed Bank of San Francisco President Mary Daly said it’s appropriate to begin cutting rates, while her Richmond counterpart Thomas Barkin said he still saw upside risks for inflation, though he supported “dialing down” rates.
“Powell sealed the deal for a September cut at Jackson Hole — leaving intact our thesis for continued broadening/rotation,” said Ohsung Kwon at Bank of America Corp. “But don’t sleep on Nvidia earnings, a consistent driver of S&P returns and still a risk to markets if they disappoint.”
BloombergIn corporate news, LG Electronics Inc. is considering an initial public offering for its India business, tapping a booming stock market to help hit a target of $75 billion in electronics revenue by 2030. BHP Group Ltd., the world’s biggest miner, reported full-year profit edged up 2%, in line with analyst forecasts, even as China’s property market continued to weigh on its economy and demand for iron ore.
In commodities, oil edged lower early Tuesday, following gains on Monday as Libya’s eastern government said it will halt exports. Gold was little changed.
