(Bloomberg) — European and U.S. stock futures fell as Nvidia Inc.’s outlook fell short of its highest expectations, chipping away at a global rally in AI stocks.
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Euro Stoxx 50 futures fell 0.2%, while Nasdaq 100 Index futures were down 0.5%. Asian stock indexes were down 0.2%, with chipmakers Taiwan Semiconductor Manufacturing Co. (TSMC) and SK Hynix leading the way. Nvidia was down more than 8% in after-hours trading.
Nvidia's disappointing sales outlook threatens to dampen the AI boom that has driven global tech stocks for much of this year. Once the pivotal results are digested, investors' attention will turn to a round of U.S. data later on Thursday, including consumer spending and weekly jobless claims, that could solidify expectations about how quickly the Federal Reserve will ease monetary policy this year.
“Expectations were very high and we knew this was going to happen sooner or later,” Joshua Crabb, head of Asia Pacific equities at Robeco Hong Kong, said of Nvidia's results. “It's going to be a tough day for AI proxies.”
The 10-year Treasury yield was flat after rising one basis point to 3.84% in the previous trading session, while the dollar edged down after a broad rally on speculation that investors were buying greenbacks to rebalance their portfolios.
Investors are weighing the prospects of a U.S. interest rate cut, with Atlanta Fed President Raphael Bostic saying “it may be time for a rate cut” but still seeking more data to support a cut next month.
The New Zealand dollar strengthened after the country's business confidence surged to a 10-year high. In Japan, a recent rise in yields attracted investors, pushing bids for two-year government bonds to their highest since 2019.
China continues to struggle. Shares in electric vehicle maker Li Auto fell 15% after it missed expectations. Rival BYD also fell despite a 33% rise in profits. The downturn was exacerbated by UBS Group AG cutting its growth forecasts for China this year and next, citing a worse-than-expected drop in the real estate market.
Nvidia's guidance came in disappointing, but sales more than doubled to $30 billion in the second quarter ended July 28. The Santa Clara, California-based company's board also authorized an additional $50 billion in share buybacks.
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In commodities, crude oil stabilized after two days of declines as lower stock prices offset drawdowns in U.S. stockpiles and supply disruptions in Libya. Gold traded just below its all-time high and is on track for a monthly gain.
Major events this week:
Eurozone consumer confidence on Thursday
US GDP, initial jobless claims Thursday
Federal Reserve President Raphael Bostic to speak Thursday
Japan unemployment rate, Tokyo consumer price index, industrial production, retail sales, Friday
Eurozone CPI, unemployment rate on Friday
US Personal Income, Spending, PCE, Consumer Sentiment Friday
Some of the key market developments:
stock
S&P 500 futures were down 0.2% as of 6:50 a.m. London time.
Nikkei 225 futures (OSE) fell 0.1%
Japan's TOPIX was little changed
Australia's S&P/ASX 200 fell 0.3%
Hong Kong's Hang Seng Index fell 0.1%
The Shanghai Composite Index fell 0.4%
Euro Stoxx 50 futures fell 0.2%
Nasdaq 100 futures fell 0.5%
currency
The Bloomberg Dollar Spot Index fell 0.1%.
The euro rose 0.1% to $1.1135.
The Japanese yen was almost unchanged at 144.68 yen to the dollar.
The offshore yuan rose 0.3% to 7.1112 yuan per dollar.
The Australian dollar rose 0.3% to $0.6802.
The British pound rose 0.2% to $1.3213.
Cryptocurrency
Bitcoin rose 0.2% to $59,450.99.
Ether little changed at $2,540.3
Bonds
The yield on the 10-year Treasury note was little changed at 3.83%.
Japan's 10-year government bond yield remained unchanged at 0.890%
Australia's 10-year government bond yield rose 2 basis points to 3.95%.
merchandise
West Texas Intermediate crude rose 0.2% to $74.69 a barrel.
Spot gold rose 0.5% to $2,517.76 an ounce.
This story was produced with assistance from Bloomberg Automation.
–With assistance from Matthew Burgess, Kurt Schussler, and Abhishek Vishnoi.
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