Stocks Trade in Narrow Band Following Nvidia’s Disappointing Performance: Market Update
Asian stock markets showed a slight increase on Thursday as investors reacted to recent tariff announcements from US President Donald Trump. Shares in Australia, Hong Kong, and Japan saw gains, while South Korean stocks experienced a decline. In China, stock prices were mixed during early trading, but overall, the regional equity market rose for the second consecutive day.
Futures for major US indexes like the S&P 500 and Nasdaq 100 remained stable following small gains on Wednesday. However, shares of Nvidia, a prominent chipmaker, dropped during after-hours trading. Nvidia released quarterly earnings that were viewed as good but not exceptional, leading to disappointment among investors who have grown accustomed to outstanding results.
On Wednesday, Trump announced that his administration would put a 25% tariff on goods from the European Union, while previously announced tariffs on Mexico and Canada are set to start on April 2. However, his statements were at times inconsistent, creating uncertainty among investors about the future of these tariffs.
The news about tariffs influenced currency markets as well, causing the US dollar to strengthen. This development helped stabilize the selloff in the Canadian dollar and Mexican peso and added to the uncertainty that has affected stock markets and cryptocurrencies over the past week. Research suggests that Trump’s latest tariffs on China could impact the American economy more significantly than reported trade data implies.
Marvin Loh from State Street pointed out that the mixed signals regarding the timing and scope of tariffs are causing investors to feel uneasy. The ongoing discussion raises questions about whether Trump will delay or modify his plans further or if he will intensify his aggressive stance.
Treasury bonds experienced a slight decline following a rally the previous day that had pushed the yield on the US 10-year note to its lowest level since mid-December. The dollar held on to its gains, while yields in Australia fell early Thursday.
Bitcoin’s value decreased to around $84,000, which is a drop of over 20% from its peak last month. The decline in Bitcoin was exacerbated by outflows from exchange-traded funds. Similarly, oil prices fell, while gold prices remained relatively unchanged.
In Asian markets, the Japanese yen traded at about 149 per dollar after closing unchanged the previous Wednesday. The top currency official in Japan signaled that he had no issues with growing market expectations regarding potential interest rate hikes by the Bank of Japan, which helped strengthen the yen to a four-month high.
The Group of Twenty (G20) finance ministers and central bank governors are scheduled to meet in Cape Town. Additionally, later on Thursday, consumer confidence figures from the eurozone will be released, along with the US gross domestic product data and initial jobless claims.
Following Nvidia’s financial results, a $330 billion exchange-traded fund tracking the Nasdaq 100 initially rose after regular trading hours, with hopes that Nvidia’s earnings would boost the ongoing rally driven by artificial intelligence. Nvidia reported $11 billion in revenue from its Blackwell product in the last quarter, describing it as the fastest product ramp-up in its history. However, concerns linger regarding spending from data center operators in the AI sector.
This week will feature several key economic events, including eurozone consumer confidence and key US economic indicators, such as GDP, durable goods, and unemployment claims.
In summary, while Asian markets showed some resilience amid tariff concerns and mixed earnings reports, uncertainty continues to dominate the investment landscape. Market participants are closely watching developments from the G20 meeting and upcoming economic data releases.
