Nvidia miss doesn’t deter new Wall St records; Fed governor sues for job
Europe is making concessions to get auto tariff relief.
Wall Street shrugged off the little disappointments in Nvidia’s quarterly result that saw the world’s biggest company come off the boil, although analysts are still raising their target prices on the chipmaker underpinning much of the artificial intelligence boom.
Meanwhile, Federal Reserve governor Lisa Cook is suing US President Donald Trump to block his move to fire her, saying the allegations of mortgage fraud were concocted and the attempted ouster was unlawful.
The US economy’s pace of growth was revised higher in the latest gross domestic product estimate after the bout of tariff-induced volatility exaggerated the contraction at the start of the year, while across the Atlantic, European policymakers have offered concessions to the White House to get lower import levies for its auto sector.
And the domestic earnings season is coming to a close, with Port of Tauranga the highlight of the local session, while winemaker Delegat Group, Move Logistics and ailing honey company Comvita are also in the diary.
Not all bad
Nvidia was down 0.8% in late trading, paring some of the steeper declines during afterhours trading, after the chipmaker’s record quarterly revenue and profit weren’t enough to calm investors’ nerves about the pace of growth in the chipmaker’s data centre segment or an outlook that didn’t meet hyped up expectations.
Still, at least 10 analysts have raised their target prices on the stock on the chipmaker’s long-term prospects.
“After the bell yesterday, Nvidia’s earnings report was broadly in line with expectations but the market focused on its data centre segment, where that fell a little short of expectations,” Bank of New Zealand senior markets strategist Jason Wong said in a note. “Furthermore, the company excluded any AI chip revenue from China from its projections as it awaits further information from the US government codifying the recently imposed export tax on chips to China.”
Shares of Taiwan Semiconductor Manufacturing Co declined, although major AI investors including Meta Platforms, Amazon and Microsoft all advanced on the day, and HP rallied as AI-enable personal computers helped it beat sales expectations.
The major indices touched new records with the S&P 500 up 0.4% in late trading and the Nasdaq Composite climbing 0.6%.
Stock markets in Europe were mixed as investors digested Nvidia’s result, with the UK’s FTSE 100 down 0.4% and Germany’s DAX 40 just in negative territory, while France’s CAC 40 advanced 0.2%.
Give and take
The European Union set out plans to cut tariff rates on a range of US goods as a concession to the White House in seeking a reduction in import levies on the continent’s automotive sector. The kiwi dollar traded at 50.37 euro cents at 7am in Auckland from 50.35 cents yesterday.
Meanwhile, Federal Reserve governor Lisa Cook is suing US President Donald Trump to keep her job, calling the ouster unlawful with the concocted reason an unsubstantiated and unproven allegation of mortgage fraud that fell short of due cause.
The annual pace of US economic growth was upgraded to 3.3% in the June quarter from an earlier estimate of 3%.
BNZ's Wong said the US economy is showing some resilience and running stronger than many had expected.
The kiwi dollar rose to 58.88 US cents from 58.60 cents yesterday.
Australian futures are pointing to a 0.3% decline for the S&P/ASX 200 index when trading opens across the Tasman.
The domestic earnings season is coming to a close today – retailers and dairy processors will report next month – with Port of Tauranga the main highlight of the day. The major transport hub is expected to report 22% profit growth and hike its dividend as it enjoyed pricing gains and more manageable costs.
Among other companies reporting in New Zealand today are winemaker Delegat, Move Logistics and honey products maker Comvita, which is currently facing a takeover bid. Across the Tasman, Virgin Australia will mark its first result since returning to the ASX earlier this year.
Local data today include ANZ’s monthly consumer confidence survey.
