Chipmaker Nvidia continues to ride the artificial intelligence wave, becoming the first company to hit a US$4 trillion market capitalisation as Wall Street shrugged off trade fears and resumed its upward trajectory.
US President Donald Trump issued more tariff letters to seven nations, including the Philippines, and isn’t expected to have good news for Brazil when he tells the Latin American nation what import levy it will face.
Meanwhile, OpenAI is reportedly close to releasing an AI-powered web browser, threatening the stranglehold of Alphabet’s Google Chrome.
And as advertising agencies face an existential threat from AI, London-listed WPP posted its biggest single-day slump in more than 30 years after cutting its earnings outlook.
Calming down
The tech-heavy Nasdaq Composite was up 0.8% in late trading and the S&P 500 rose 0.5% as investors shrugged off the latest round of tariff letters sent out by US President Donald Trump, with trading partners having until the end of the month before the new regime comes into effect.
Nvidia broke a new record as it touched a US$4 trillion market cap through the trading session and was recently up 1.9% at US$162.955, valuing the chipmaker at US$3.9 trillion.
“Market reaction to Trump’s latest sweep of tariff announcements has been nothing like what we saw in early April, and investors are taking a punt that the average US tariff rate won’t end up far from the current level,” Bank of New Zealand senior market strategist Jason Wong said in a note. “Thus, equity investors are unperturbed and the S&P500 is currently up 0.4%, with Nvidia briefly trading at a market cap of US$4 trillion, the first company to reach that milestone.”
Trump announced more tariff rates for seven trading partners, with the Philippines facing a 20% rate from August, Sri Lanka, Algeria, Iraq and Libya getting a 30% tariff, and Brunei and Moldova 25%.
US negotiations with the European Union to reach a deal are continuing, and Trump said he’ll release more letters on Wednesday, including one for Brazil which he said hadn’t been good to the world’s biggest economy.
Wait and see
Minutes to the Federal Reserve’s last policy meeting showed most policymakers felt it was appropriate for interest rates to come down later this year, but were wary to do so at the review given the uncertainty over Trump’s tariff regime.
New Zealand and Australia’s central banks both kept their key rates unchanged at reviews this week, preferring instead to wait for more data on whether inflationary pressures were continuing to abate, while Bank Negara Malaysia cut its key rate a quarter point to 2.75% in its first reduction in five years.
Meanwhile, Microsoft and Google-parent Alphabet were both stronger amid reports ChatGPT maker OpenAI is poised to launch its own AI-powered web browser.
AI is seen as a major threat to traditional advertising agencies, giving clients the ability to do their own marketing. London-listed WPP sank 19% after cutting its profit outlook after losing some major customers and saying ad spending was down.
And X chief executive Linda Yaccarino said she’s stepping down from the social media company after Elon Musk hired her to run the former Twitter two years ago. Meta Platforms rose 1.9% , while Snap declined 1.5%.
Across the Atlantic, stock markets were stronger with London’s FTSE 100 index up 0.2%, while Germany’s DAX 30 and France’s CAC 40 both gained 1.4%.
Australian futures are pointing to a 0.6% increase for the S&P/ASX 200 index when it opens.
Local data today include May travel and migration figures from Statistics New Zealand, while Black Pearl Group is holding its annual meeting online today.
Reporting by Paul McBeth. Image from Jonathan Kemper on Unsplash.
