Asian stocks follow Wall Street futures lower as Nvidia results disappoint | World News

Nvidia’s third-quarter revenue forecast of $32.5 billion exceeded Wall Street estimates, but the results failed to convince the most optimistic investors and caused the stock to rally dizzyingly.

The AI ​​darling’s shares fell 7.6 percent in after-hours trading, losing around $236 billion in market value.

As a result, Nasdaq futures fell 1 percent at the start of the Asian market, while S&P futures fell 0.5 percent.

Nvidia’s chip supplier TSMC lost 2.4 percent at the start of trading, dragging the broader Taiwanese market down 1.3 percent.

“Nvidia has in some ways become a victim of its success, with its share price up over 180 percent this year after the company has now beaten earnings forecasts in 14 of the last 15 quarters,” said Tony Sycamore, analyst at IG.

“Whether today’s results signal the end of investors’ strong affinity for the chipmaker remains to be seen. However, the reaction following the release of the results at least suggests that it is an excellent time to think about diversifying away from Nvidia and into other chipmakers.”

China’s blue chips fell 0.4 percent for the fourth straight day as disappointing results from Chinese companies highlighted the country’s weak economic recovery. UBS on Wednesday cut its GDP growth forecast for China in 2024 to 4.6 percent from 4.9 percent.

Chinese battery maker CATL fell 2 percent after two leading Republican lawmakers tried to put the company on a list of firms allegedly working with Beijing’s military.

US National Security Advisor Jake Sullivan concludes three days of talks in Beijing aimed at easing simmering tensions between the two superpowers.

Chinese food delivery company Meituan rose 7 percent after reporting a stronger-than-expected 21 percent rise in second-quarter sales.

Bond and currency markets remained broadly stable in the Asian session. Fed Chairman Raphael Bostic said on Wednesday it may be “time to do something” on rate cuts, but he wants to see confirmation from the jobs report and two inflation reports before the September meeting.

The dollar steadied above lows more than a year old, undermined by expectations of an imminent Fed rate cut. Futures have fully priced in a quarter-percentage-point cut next month and even suggest a 35 percent chance of a half-percentage-point cut.

The euro held at $1.113 after falling 0.6 percent overnight and failing to break key resistance at $1.12.

U.S. Treasury yields were mixed overnight, but the inverted two- to 10-year yield curve continued to rise and was just a touch away from turning positive. That would be the first time since July 2022, aside from the brief move backwards during the market crash earlier this month.

The two-year yield remained at 3.8692 percent after falling 4 basis points overnight, while the 10-year yield was little changed at 3.8368 percent, just 3 basis points below the two-year rate.

The price of gold rose again, narrowly missing a new high. The price of gold rose 0.4 percent to $2,512.89 an ounce, just below its record high of $2,531.6.

Oil prices rose slightly after two consecutive declines as concerns about demand from China and the US counteracted supply disruptions from Libya. [O/R]

Brent crude futures rose 0.1 percent to $78.75 a barrel, after falling more than 3 percent over the past two days, while U.S. West Texas Intermediate crude futures rose 0.2 percent to $74.69.

First published: August 29, 2024 | 9:19 am IS