Asian stocks fall as Nvidia earnings eyed: Markets roundup

(Bloomberg) — Asian stocks fell after tech giants dragged U.S. stocks lower, with the focus shifting from Federal Reserve policy expectations to Nvidia Corp. earnings later this week.

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Hong Kong and Chinese markets fell, tracking weakness in shares in South Korea and Australia. U.S. futures fell in Asian trading after some of the world’s biggest technology companies dragged Wall Street lower.

The declines came after the “Big Seven” index fell 1.2% on Monday. While more than half of the S&P 500 stocks rose, the U.S. stock index fell — a result of weakness in the tech giants that dominate it.

U.S. Treasury bond prices were largely steady in Asia after the yield on the 10-year note rose 2 basis points to 3.82% on Monday. The dollar was steady.

Expectations are high ahead of Nvidia Corp.’s earnings report on Wednesday, with analysts expecting another strong consensus that could prompt the chipmaker to raise its earnings guidance. The results could provide more clarity on demand for artificial intelligence, as Nvidia is a direct beneficiary of heavy spending by companies building AI infrastructure.

“Step aside, Powell — it’s Jensen Hwang’s turn to move the markets,” said Anthony Saglimbin of Ameriprise. “In our view, this week’s Nvidia earnings report could have a bigger impact on the overall market than Powell’s Jackson Hole speech last week.”

Chinese consumers are back in the spotlight after shares of PDD Holdings Inc. plunged the most since 2022 in New York. The Temu owner’s warning of slowing sales was the latest disappointment from the sector, as the country’s largest consumer companies reported lower revenue.

The world’s second-largest economy has shown some promising signs in the manufacturing sector, with industrial profits at major Chinese firms expanding 4.1% year-on-year in July.

In China, too, the government urged Canada to immediately correct the “wrong practices” of new tariffs against the Asian country. Canada, an export-driven economy that relies heavily on trade with the United States, has been closely watching the Biden administration’s moves to erect a much higher tariff wall against electric vehicles, batteries, solar cells, steel and other Chinese products.

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This week’s US inflation figures are likely to reinforce the fact that long-awaited interest rate cuts are coming soon, while a reading on consumer spending suggests the central bank has managed to keep the expansion intact.

Economists expect the core personal consumption expenditures price index, excluding food and energy, the Fed’s preferred measure of core inflation, to rise 0.2% in July for the second straight month. That would bring the three-month annual core inflation rate down to 2.1%, just above the central bank’s 2% target.

San Francisco Federal Reserve President Mary Daly said it was appropriate to start cutting interest rates, while her Richmond counterpart Thomas Barkin said he still saw risks of higher inflation, though he supported “lowering” rates.

“Powell sealed the deal on a September rate cut at Jackson Hole — leaving our expansion/recycling thesis intact,” said Ausung Kwan of Bank of America Corp. “But we shouldn’t ignore Nvidia’s earnings, which are a consistent driver of S&P returns and still pose a risk to markets if they disappoint.”

In corporate news, LG Electronics Inc. is considering an initial public offering of its Indian business, tapping a booming stock market to help it achieve a target of $75 billion in electronics revenue by 2030. BHP Group Ltd., the world’s largest miner, reported a 2% rise in full-year profit, in line with analysts’ expectations, even as China’s property market continues to weigh on its economy and demand for iron ore.

In commodity markets, oil prices retreated after Monday’s gains after the government in eastern Libya said it would halt exports. Gold fell.

Main events this week:

• China’s industrial profits Tuesday

• German GDP, Tuesday

• US Consumer Confidence Index released by the Conference Board, Tuesday

• Nvidia Earnings, Wednesday

• Fed’s Rafael Pusic and Christopher Waller speak Wednesday

• Eurozone Consumer Confidence, Thursday

• US GDP, Initial Jobless Claims, Thursday

• Fed’s Raphael Boucek speaks Thursday

• Japan Unemployment, Tokyo CPI, Industrial Production, Retail Sales, Friday

• Eurozone CPI and Unemployment, Friday

• US Personal Income, Spending, CPI; Consumer Sentiment, Friday

Some key movements in the markets:

Stocks

• S&P 500 futures were down 0.1% as of 10:49 a.m. in Tokyo.

• Nasdaq 100 futures fell 0.1%.

• Japan’s Topix index rose 0.2%.

• Australia’s S&P/ASX 200 was little changed.

• Hong Kong’s Hang Seng Index fell 0.8%.

• The Shanghai Composite Index fell 0.2%.

• Euro Stoxx 50 futures were unchanged.

Currencies

• The Bloomberg Dollar Index was little changed.

• The euro was little changed at $1.1170.

• The Japanese yen was little changed at 144.64 yen to the dollar.

• The offshore yuan was little changed at 7.1257 against the dollar.

Cryptocurrencies

• Bitcoin fell 0.6% to $63,066.34

• Ether fell 0.2% to $2,683.64.

Bonds

• The yield on the 10-year US Treasury note was little changed at 3.81%.

• The yield on the 10-year Japanese bond was unchanged at 0.880%.

• The yield on the 10-year Australian bond rose three basis points to 3.88%.

Goods

• West Texas Intermediate crude fell 0.5% to $77.02 a barrel.

• Spot gold fell 0.3 percent to $2,509.48 an ounce.

This story was produced with the help of Bloomberg Automation.

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