Nvidia slides as Huang comes under the microscope; Wall Street rallies
Oil declines as Trump plays down chance of Iran strike.
Nvidia tumbled after the chipmaker’s board launched an investigation into reports that chief executive Jensen Huang had been targeted by foreign intelligence, although the tech giant’s woes didn’t spill over to the broader market, which continued to recover from last week’s slump on the midterm election outcome.
Stocks in the US and Europe rallied as oil prices dropped after US President Donald Trump said extensive strikes on Iran were highly unlikely, although Secretary of State Marco Rubio noted some of the Islamic Republic’s demands were unacceptable.
Earnings season continued as Berkshire Hathaway slid after reporting a decline in operating profit over the weekend and private equity giant KKR advanced after it beat expectations with increased fees, while local investors await Rocket Lab’s result after the bell.
And Australian futures are pointing to a stronger start to the day for the ASX, while Reserve Bank of New Zealand chief economist Paul Conway’s speech to the UBS Australasia conference in Sydney on local economic conditions will be watched for his comments on the decision to keep the benchmark rate on hold.
Out from the cold
Nvidia dropped 5.7% in late trading, putting the chipmaker on track to wipe US$258 billion from the company’s market value, after its board launched an investigation into reports that Huang had been targeted by Chinese spies in his extramarital affair with an executive at Singaporean company Megaspeed. Chinese authorities have denied the spying allegations.
Meanwhile, the New York Times reported Nvidia intervened in a US Commerce Department investigation into whether Megaspeed was smuggling Nvidia chips into China, with the probe transferred to the Justice Department.
Still, the chipmaker’s decline didn’t spill over into the broader market with stocks on both sides of the Atlantic rallying as Brent crude oil futures dropped 4.9% to US$93.50 a barrel at 7am in Auckland after US President Trump played down the likelihood of escalating strikes on Iran.
The Nasdaq Composite jumped 2.6% and the S&P 500 advanced 2.4%, while the Dow Jones Industrial Average climbed 2.3%, led higher by Caterpillar, Cisco Systems and Goldman Sachs.
“The rebound suggests investors are returning to beaten-down AI and technology stocks, with concerns about the impact of tighter data-centre regulation appearing less immediate,” Moomoo market strategy consultant Greg Boland said in a note. “Nevertheless, last week’s volatility shows that confidence in the AI investment cycle remains fragile.”
Still counting
Berkshire Hathaway dipped after reporting softer earnings over the weekend, while KKR advanced after beating analysts’ expectations as funds under management grew 11%, fuelling higher fees.
Mining giant Barrick jumped 5.1% as gold and copper prices fuelled earnings growth. Gold futures were up 0.9% at US$4,110 an ounce.
Sharesies favourite Rocket Lab is due to report after the bell along with Paramount Skydance and Hims & Hers.
Stocks were stronger in Europe, with the UK’s FTSE 100 up 1%, Germany’s DAX gaining 1.7% and France’s CAC 40 advancing 1.2%.
France’s Crédit Agricole said it had approached Italy’s Banco BPM about a potential merger.
Meanwhile, German chancellor Friedrich Merz said his nation’s backing for the European Union’s next seven-year budget would rely on all members contributing financial support for Ukraine.
Australian futures are pointing to a 0.8% gain for the S&P/ASX 200 index when trading opens across the Tasman, while the kiwi dollar rose to 56.21 US cents at 7am from 55.85 cents, and increased to 81.29 Australian cents from 81.05 cents.
No local data are due today, with RBNZ chief economist Conway’s speech in focus, given he was in the minority of monetary policy committee members who voted to hike the official cash rate. The central bank said Conway would express his own views in the presentation.
And Vital Healthcare Property Trust holds its annual meeting in Auckland today.
Reporting by Paul McBeth. Image from the World Economic Forum on Flickr.
