Asian Markets Dip as Nvidia's Results Disappoint Investors

Asian shares track Wall Street futures lower as Nvidia disappoints

MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.6% as tech stocks dragged. The Nikkei eased 0.4% while South Korea dropped 0.7%. Nvidia's third-quarter revenue forecast of $32.5 billion surpassed Wall Street estimates, but the results still failed to impress the most bullish investors, who have driven a dizzying rally in its shares. Shares of the AI darling slumped 7.6% in after-hour trading, losing about $236 billion of its market value. As a result, Nasdaq futures dropped 1% early in Asia, while S&P futures skidded 0.5%. Nvidia's chip contractor TSMC slid 2.4% when shares opened, dragging the broader Taiwanese market 1.3% down. "Nvidia, in some ways, has become a victim of its success, its share price soaring over 180% this year and after beating earnings now in 14 of the past 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, at the very least, the post earnings reaction does suggest it's an excellent time to consider diversifying from Nvidia into other chipmakers." China's blue chips fell 0.4% for a fourth straight day as disappointing results from Chinese companies highlighted the country's frail economic recovery. UBS on Wednesday cut its 2024 GDP growth forecast for China to 4.6% from 4.9%. Chinese battery maker CATL fell 2% after two top Republican lawmakers sought to have the firm to be added to a restricted list of companies allegedly working with Beijing's military. U.S. National Security Adviser Jake Sullivan is wrapping up three days of talks in Beijing intended to ease simmering tensions between the two superpowers. Chinese food delivery giant Meituan jumped 7% after posting a bigger-than-expected 21% rise in second-quarter revenue. Debt and currency markets were mostly steady in the Asia session. Fed Atlanta President Raphael Bostic said on Wednesday it may be "time to move" on rate cuts, but he wanted to see confirmation from the jobs reports and two inflation reports before the September meeting. The dollar steadied above more than one-year lows, undermined by expectations of imminent Fed rate cuts. Futures have fully priced in a quarter-point cut next month, and even imply a 35% probability of a half-point easing. The euro held at $1.113, having dropped 0.6% overnight and failed to break major resistance at $1.12. Treasury yields were mixed overnight, but the inverted yield curve between two years and 10 years kept steepening to just within a whisker of turning positive. That would be the first time since July 2022, barring the brief un-inverting during the market crash earlier this month. Two-year yields held at 3.8692%, having slipped 4 basis points overnight, while 10-year yields were little changed at 3.8368%, just 3 basis points below the two years. Gold climbed again and was just shy of scaling another peak. Gold prices were up 0.4% at $2,512.89 an ounce, just a touch below its record of $2,531.6. Oil edged higher after two straight sessions of declines as concerns about demand from China and the U.S. countered supply disruptions out of Libya. [O/R] Brent crude futures rose 0.1% to $78.75 a barrel, having fallen more than 3% in the past two days, while U.S. West Texas Intermediate crude futures gained 0.2% to $74.69. (Reporting by Stella Qiu; Editing by Jacqueline Wong)

Tech weighs down Asian markets after Nvidia results

A sell-off in tech firms dragged Asian markets down Thursday after investors were left disappointed by earnings from chip titan Nvidia that stoked concerns about the outlook for all things artificial intelligence. While the report beat expectations in many areas, it took the wind out of the sails for traders, who had been enjoying a run-up on the prospect of US interest rates coming down from next month. Investors had been keenly awaiting the release from California-based Nvidia, which has become a bellwether for the tech sector owing to its huge role in the development of AI chips. Analysts had warned ahead of the event that even a forecast-busting reading might not be enough to satisfy markets, which have grown used to outsized profits and revenues. Nvidia's share price is up about 160 percent year-to-date, and has accounted for a third of the broad-based S&P 500 index's gains this year. The firm -- now with a market capitalization of more than $3 trillion -- said revenue and profits more than doubled in the fiscal second quarter, while it also announced an extra $50 billion in stock buybacks. However, the growth in sales was slower than the furious pace seen in previous quarters. Dealers were also spooked by snags in the company's new generation Blackwell line of technology, the successor to the best-selling Hopper line of AI chips that thrust the company onto the world stage. Nvidia's share prices fell more than eight percent in after-hours trading. All three main indexes on Wall Street fell ahead of the release, which came after the market closing bell. In Asia tech was among the worst performers, with chip-makers taking a hit. SK hynix fell more than five percent in Seoul, where Samsung was also down almost three percent. Taipei-listed TSMC, a key producer of semiconductors, sank more than two percent and Tokyo Electron was down more than one percent in Tokyo. That weighed on broader markets, with Hong Kong, Tokyo, Shanghai, Seoul, Singapore, Taipei, Manila and Wellington all in the red. "As the bellwether for the tech industry, which now touches nearly every aspect of global business and our daily lives, Nvidia's performance is scrutinised like a crystal ball for the broader market and the US economy," said independent analyst Stephen Innes. "So when this flagship takes a hit, it has the potential to drag the entire fleet down with it. "Nvidia continues its high-wire act, defying gravity for the seventh straight quarter by beating expectations on both the top and bottom lines. But in the topsy-turvy world of post-report trading, even a solid earnings beat wasn't enough to keep investors smiling." Attention now turns back to the US economy, with data this week and next possibly playing a role in how far the Federal Reserve goes in cutting interest rates. Boss Jerome Powell said Friday that they would have to start coming down as the jobs market softens and inflation eases, but he did not provide any guidance on how big an expected reduction in September will be. Readings on gross domestic product, jobless claims and personal consumption expenditure -- the Fed's favoured gauge of inflation -- are among this week's readings, while the crucial non-farm payrolls report is due next Friday. Below-forecast results on these could firm up the case for a half-percentage-point cut, double what is expected at the moment. - Key figures around 0230 GMT - Tokyo - Nikkei 225: DOWN 0.4 percent at 38,220.34 (break) Hong Kong - Hang Seng Index: DOWN 0.8 percent at 17,555.37 Shanghai - Composite: DOWN 0.7 percent at 2,817.63 Dollar/yen: UP at 144.60 yen from 144.50 yen on Wednesday Euro/dollar: UP at $1.1129 from $1.1119 Pound/dollar: UP at $1.3205 from $1.3194 Euro/pound: UP at 84.29 pence from 84.27 pence West Texas Intermediate: UP 0.2 percent at $74.67 per barrel Brent North Sea Crude: UP 0.1 percent at $78.75 per barrel New York - Dow: DOWN 0.4 percent at 41,091.42 (close) London - FTSE 100: FLAT at 8,343.85 (close)

Asian stocks set to slide as Nvidia disappoints

Stocks in Asia tracked their US peers lower after underwhelming earnings from Nvidia Corp. dampened the outlook for the tech sector. South Korea's Kospi Index slid more than 1% as chipmakers Samsung Electronics Co. and SK Hynix Inc. slumped. Japanese shares also opened lower. Futures on the Nasdaq 100 Index were down 1% in Asia as Nvidia slumped more than 8% in post-market trading following a sales forecast that disappointed some on Wall Street. The outlook threatened to cool an AI frenzy that has transformed Nvidia into the world's second-most-valuable company. The chipmaker is the key beneficiary of a race to upgrade data centers to handle AI software, and its sales forecasts have become a barometer for that spending boom. "Nvidia's strong results and guidance failed to impress markets, primarily because of expectations and not underperformance," said Charu Chanana, head of currency strategy at Saxo Markets. "This disappointment can filter through to Asian tech space today but there is little reason to expect any derailment in AI developments or in Nvidia remaining a backbone of AI development and deployment." The S&P 500 at one point headed toward its worst drop since the Aug. 5 meltdown. The gauge pushed away from that threshold, closing down 0.6%. Wall Street's favorite volatility gauge -- the VIX -- surged to around 17. Treasury 10-year yields steadied after rising one basis point to 3.84% in the previous session. The dollar was little changed after gaining broadly amid speculation investors were buying the US currency for portfolio re-balancing. In Asia, investors will be keeping a close eye on Chinese equities after the benchmark CSI 300 fell to its lowest since February on Wednesday amid a sputtering economy. UBS Group AG downgraded its forecast for the nation's growth for this year and the next, citing a deeper-than-expected property market slump. Chinese companies delivered a mixed set of earnings, though any surprises are unlikely to ease concern over what's so far been a dismal season for consumer-oriented companies. EV giant BYD posted a 33% jump in profit while peer Li Auto Inc. missed forecasts. Meituan reported better-than-expected revenue. Elsewhere, Nippon Steel Corp. plans to invest an additional $1.3 billion at plants operated by United States Steel Corp. as the Japanese company steps up efforts to secure union support for a takeover bid that's been opposed by both President Joe Biden and Donald Trump. 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. Later Thursday, investors will shift focus to key US data including a growth reading, personal consumption and weekly jobless claims to help firm bets the Federal Reserve will quickly ease policy this year. 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. In commodities, oil steadied after a two-day drop, as technical barriers stymied gains from a decline in US stockpiles and disruptions to Libyan production. Gold recouped some of Wednesday's loss in early trading.

Asian stocks set to slide as Nvidia disappoints

The outlook threatened to cool an AI frenzy that has transformed Nvidia into the world's second-most-valuable company. The chipmaker is the key beneficiary of a race to upgrade data centers to handle AI software, and its sales forecasts have become a barometer for that spending boom.Stocks in Asia tracked their US peers lower after underwhelming earnings from Nvidia Corp. dampened the outlook for the tech sector. South Korea's Kospi Index slid more than 1% as chipmakers Samsung Electronics Co. and SK Hynix Inc. slumped. Japanese shares also opened lower. Futures on the Nasdaq 100 Index were down 1% in Asia as Nvidia slumped more than 8% in post-market trading following a sales forecast that disappointed some on Wall Street. The outlook threatened to cool an AI frenzy that has transformed Nvidia into the world's second-most-valuable company. The chipmaker is the key beneficiary of a race to upgrade data centers to handle AI software, and its sales forecasts have become a barometer for that spending boom. "Nvidia's strong results and guidance failed to impress markets, primarily because of expectations and not underperformance," said Charu Chanana, head of currency strategy at Saxo Markets. "This disappointment can filter through to Asian tech space today but there is little reason to expect any derailment in AI developments or in Nvidia remaining a backbone of AI development and deployment." The S&P 500 at one point headed toward its worst drop since the Aug. 5 meltdown. The gauge pushed away from that threshold, closing down 0.6%. Wall Street's favorite volatility gauge -- the VIX -- surged to around 17. Treasury 10-year yields steadied after rising one basis point to 3.84% in the previous session. The dollar was little changed after gaining broadly amid speculation investors were buying the US currency for portfolio re-balancing. In Asia, investors will be keeping a close eye on Chinese equities after the benchmark CSI 300 fell to its lowest since February on Wednesday amid a sputtering economy. UBS Group AG downgraded its forecast for the nation's growth for this year and the next, citing a deeper-than-expected property market slump. Chinese companies delivered a mixed set of earnings, though any surprises are unlikely to ease concern over what's so far been a dismal season for consumer-oriented companies. EV giant BYD posted a 33% jump in profit while peer Li Auto Inc. missed forecasts. Meituan reported better-than-expected revenue. Elsewhere, Nippon Steel Corp. plans to invest an additional $1.3 billion at plants operated by United States Steel Corp. as the Japanese company steps up efforts to secure union support for a takeover bid that's been opposed by both President Joe Biden and Donald Trump. 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. Later Thursday, investors will shift focus to key US data including a growth reading, personal consumption and weekly jobless claims to help firm bets the Federal Reserve will quickly ease policy this year. 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. In commodities, oil steadied after a two-day drop, as technical barriers stymied gains from a decline in US stockpiles and disruptions to Libyan production. Gold recouped some of Wednesday's loss in early trading.

Tech weighs down Asian markets after Nvidia results

Hong Kong (AFP) - A sell-off in tech firms dragged Asian markets down Thursday after investors were left disappointed by earnings from chip titan Nvidia that stoked concerns about the outlook for all things artificial intelligence. While the report beat expectations in many areas, it took the wind out of the sails for traders, who had been enjoying a run-up on the prospect of US interest rates coming down from next month. Investors had been keenly awaiting the release from California-based Nvidia, which has become a bellwether for the tech sector owing to its huge role in the development of AI chips. Analysts had warned ahead of the event that even a forecast-busting reading might not be enough to satisfy markets, which have grown used to outsized profits and revenues. Nvidia's share price is up about 160 percent year-to-date, and has accounted for a third of the broad-based S&P 500 index's gains this year. The firm -- now with a market capitalization of more than $3 trillion -- said revenue and profits more than doubled in the fiscal second quarter, while it also announced an extra $50 billion in stock buybacks. However, the growth in sales was slower than the furious pace seen in previous quarters. Dealers were also spooked by snags in the company's new generation Blackwell line of technology, the successor to the best-selling Hopper line of AI chips that thrust the company onto the world stage. Nvidia's share prices fell more than eight percent in after-hours trading. All three main indexes on Wall Street fell ahead of the release, which came after the market closing bell. In Asia tech was among the worst performers, with chip-makers taking a hit. SK hynix fell more than five percent in Seoul, where Samsung was also down almost three percent. Taipei-listed TSMC, a key producer of semiconductors, sank more than two percent and Tokyo Electron was down more than one percent in Tokyo. That weighed on broader markets, with Hong Kong, Tokyo, Shanghai, Seoul, Singapore, Taipei, Manila and Wellington all in the red. "As the bellwether for the tech industry, which now touches nearly every aspect of global business and our daily lives, Nvidia's performance is scrutinised like a crystal ball for the broader market and the US economy," said independent analyst Stephen Innes. "So when this flagship takes a hit, it has the potential to drag the entire fleet down with it. "Nvidia continues its high-wire act, defying gravity for the seventh straight quarter by beating expectations on both the top and bottom lines. But in the topsy-turvy world of post-report trading, even a solid earnings beat wasn't enough to keep investors smiling." Attention now turns back to the US economy, with data this week and next possibly playing a role in how far the Federal Reserve goes in cutting interest rates. Boss Jerome Powell said Friday that they would have to start coming down as the jobs market softens and inflation eases, but he did not provide any guidance on how big an expected reduction in September will be. Readings on gross domestic product, jobless claims and personal consumption expenditure -- the Fed's favoured gauge of inflation -- are among this week's readings, while the crucial non-farm payrolls report is due next Friday. Below-forecast results on these could firm up the case for a half-percentage-point cut, double what is expected at the moment. West Texas Intermediate: UP 0.2 percent at $74.67 per barrel

Stocks steady near record peaks as Nvidia earnings loom

Europe's benchmark STOXX index climbed 0.4% to a one-month high, boosted by technology stocks ahead of rosy expectations for the Nvidia earnings update later in the day. Nvidia's market value has ballooned thanks to its dominance of the computing hardware behind artificial intelligence. The stock price is up some 3000% since 2019 and with a market capitalisation of $3.2 trillion, a move in its share price affects the broader market. Second-quarter revenue will likely have doubled, though even that may disappoint expectations. Options pricing shows traders anticipate a near 10% - or $300 billion - swing in market value, likely the largest earnings move of any company, ever. The results at the "so-called 'most important company in the world,'" stand between Wall Street and fresh record highs, noted Capital.com analyst Kyle Rodda, and set the tone for the sector. "The company's revenue and sales guidance is a barometer of AI capex, with inferences to be drawn about the health of the other mega-cap tech names," he said. S&P 500 futures and Nasdaq 100 futures edged lower, as investors held back ahead of the crucial earnings report. Any disappointment in Nvidia's results could hurt megacaps and other semiconductor stocks, which have led 2024's rally on the prospect of AI integration boosting corporate profits. Shares in Australian gambling company Tabcorp meanwhile were headed for their largest fall since 2008, dropping 17% to a four-year low after the company warned compliance and other costs meant it would miss earnings targets. DOLLAR IN THE DUMPS Debt and currency markets were steady in the Asia session, though the Australian dollar briefly touched its highest since January at $0.6813 after monthly inflation data was slightly above market forecasts. Globally, a weakening U.S. dollar in anticipation of Federal Reserve rate cuts has lifted most other currencies because markets see U.S. short-term rates, currently above 5.25%, as having the furthest to fall. The greenback held near its lowest in more than a year against a basket of peers, and was last 0.4% higher at 100.98, hovering above a 13-month low of 100.51 hit in the previous session. Interest rate futures price 100 basis points of U.S. rate cuts this year and last week Fed Chair Jerome Powell endorsed the start of cuts saying "the time has come". The tone contrasts with caution at the Bank of England, which has helped sterling become the top-performing G10 currency with a 4.1% gain for the year-to-date. It hit its highest in more than two years on Tuesday at $1.3269, but eased on Wednesday to $1.3212 in European trade. [GBP/] "In our view, the BoE is likely to only cut rates once a quarter going forward," Rabobank senior strategist Jane Foley said in a note, against a forecast for four consecutive 25 bp cuts from the Fed from September to January. Rates markets were steady with 10-year U.S. Treasury yields at 3.81%, two-year yields at 3.86% and the gap between the two at its narrowest in nearly three weeks. Heavy selling drove bitcoin down 3% on the dollar to $59,972. Gold prices, under pressure from the dollar's slight recovery, slipped 0.9% to $2501 an ounce. Oil prices fell nearly 2% on concerns about Chinese demand and risks of a broader slowdown. Brent crude futures traded at $78.27 barrel, while U.S. West Texas Intermediate crude futures fell 1.76% to $74.2. [O/R] (Reporting by Tom Westbrook and Lawrence White, Editing by Jacqueline Wong and Bernadette Baum)

Stocks flat ahead of Nvidia earnings, US economic data

Europe's benchmark STOXX index climbed 0.47% to a one-month high, boosted by technology shares. Japanese stocks closed 0.22% higher. MSCI's gauge of all stocks across the globe was 0.05% lower at 830.43, but still near the record close of 831.34 reached on Aug. 23. Nvidia's market value has ballooned, thanks to its dominance of the computing hardware behind artificial intelligence. The stock price is up some 3,000% since 2019 and with a market capitalisation of $3.2 trillion, a move in its share price affects the broader market. The chipmaker's second-quarter revenue will likely double, though even that may disappoint expectations. Options pricing shows traders anticipate a near 10% - or $300 billion - swing in market value, likely the largest earnings move of any company, ever. "Everyone is thinking about Nvidia's earnings later today," said Michael Ashley Schulman, chief investment officer at Running Point Capital in Los Angeles, adding that there was perhaps more apprehension about the numbers than about Federal Reserve Chair Jerome Powell's Jackson Hole speech on Friday. "As Nvidia goes, that's an indicator for the rest of the technology industry. And technology as an industry is an indicator for the rest of the market because many sectors are now technology dependent." Any disappointment in Nvidia's results could hurt megacaps and other semiconductor stocks, which have led 2024's rally on the prospect of AI integration boosting corporate profits. "People don't want to make a major move ahead of a large announcement, and Nvidia's announcement is considered large," Schulman added. A preliminary estimate of second quarter U.S. gross domestic product is due later this week, along with the Fed's preferred inflation measure - the core personal consumption expenditures (PCE) index. The yield on benchmark U.S. 10-year Treasury notes fell 0.8 basis points to 3.825%. After a recent run of declines, the dollar was advancing. The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, gained 0.37% to 100.98, with the euro down 0.5% at $1.1128. Gold prices were hurt by the stronger U.S. dollar with spot gold down 0.75% at $2,505.75 an ounce and U.S. gold futures 0.6% lower at $2,537.60. Oil prices fell on concerns about Chinese demand and risks of a broader slowdown. Brent crude futures traded 1.02% lower at $78.74 a barrel, while U.S. West Texas Intermediate crude futures fell 1.14% to $74.66. [O/R] (Reporting by Chibuike Oguh in New York and Lawrence White in London, Editing by Bernadette Baum, Kirsten Donovan)

Asia markets in red tracking losses on Wall Street as investors assess Nvidia results

The Asia-Pacific equity markets were mostly in red on Thursday, tracking Wall Street and futures lower, as megacap technology stocks in the US came under pressure as investors reacted to Nvidia's latest earnings report. The Japan (NKY:IND) -0.08%. The Nikkei 225 Index fell on Thursday, snapping a two-day advance, as losses in technology stocks outweighed gains in other sectors. China (SHCOMP) -0.45%. The Shanghai Composite dropped on Thursday, hitting its lowest levels in nearly seven months, with technology stocks leading the decline as Nvidia's disappointing earnings report hurt sentiment towards the sector. Financials, property, and consumers also moved in the red after UBS Group cut its forecast for China's growth for this year and the next, citing a deeper-than-expected property market slump. In China, official PMIs data for July is set to be published Saturday. Meanwhile, total new capital expenditure in Australia unexpectedly fell by 2.2% quarter-on-quarter in the second quarter of 2024. Private new capital expenditure on buildings and structures in Australia declined by 3.8% quarter-on-quarter in Q2 of 2024. Private new capital expenditure on equipment, plants, and machinery in Australia contracted by 0.5% quarter-on-quarter in Q2 of 2024. In the U.S., on Wednesday, all three major indexes ended in red ahead of chip giant Nvidia's quarterly results. Nvidia shares tumbled about 7% in extended trading even after the AI chipmaker topped revenue and earnings expectations, as the firm's sales outlook for the current quarter failed to excite investors. U.S. stock futures were mixed on Thursday: Dow +0.23%; S&P 500 -0.32%; Nasdaq -0.66%. Nasdaq 100 futures dropped as much as 1.4% on Thursday following Nvidia's latest earnings report. Markets are looking forward to a second estimate for Q2 GDP, and the latest initial jobless claims will be released later today, while the Fed-preferred inflation gauge, the PCE price index report, will follow on Friday.