Nvidia drove the Nasdaq Composite to a new record after US President Donald Trump eased restrictions on the chipmaker from selling artificial intelligence chips to China, buoying it peers such as Advanced Micro Devices and Super Micro Computer.
Meanwhile, the Dow Jones Industrial Average and S&P 500 were both in the red as US inflation sped up once the White House’s tariff regime started to bite in June.
Better-than-expected earnings from JPMorgan Chase and Wells Fargo didn’t spare the banks from the selloff in the majors, while BlackRock skidded lower after the world’s biggest money manager lost a major institutional client.
And Indonesia is the latest country to cut a deal with the US, accepting a tariff rate of 19% on selling into the world’s biggest economy while US exporters won’t face an import levy selling to the Southeast Asian nation.
A timely meeting
Nvidia climbed 3.8% as investors welcomed the easing of restrictions on the chipmaker’s sales of H20 AI chips to China after its chief executive Jensen Huang met with US President Donald Trump. AMD and Super Micro joined the rally and the Nasdaq Composite climbed to a record, up 0.6% in late trading.
Meanwhile, the Dow and S&P were both in the red after US inflation accelerated to an annual pace of 2.7% as Trump’s tariff regime started to bite into consumer prices.
“For items where tariffs have been imposed, there was visible sign of higher inflation, including toys, household furnishings, sports equipment and appliances all inflating at multi-year highs,” Bank of New Zealand senior markets strategist Jason Wong said in a note. “In terms of market reaction, after the market had fully absorbed the data, rates moved higher, consistent with a message that the data reduced uncertainty about the monetary policy outlook to the extent that the data provided confirmation that higher tariffs are leading to higher inflation.”
The kiwi dollar fell to 59.47 US cents at 7am in Auckland from 59.77 cents yesterday.
Cold hard money
US banks were broadly weaker despite JPMorgan raising its outlook for net interest income and Wells Fargo’s profit outlook improving on lower loan provisioning.
Citigroup bucked the trend as it gained 4.8% after beating analysts’ estimates and announcing plans to buy back at least US$4 billion of stock.
And BlackRock dropped 5.4% after losing a large Asian institutional client, which pulled US$52 billion from money manager’s index funds, which left its second-quarter revenue short of expectations.
Across the Atlantic, stock markets were weaker with the UK’s FTSE 100 index down 0.7% and Germany’s DAX 30 falling 0.4% as investors continued to worry about the impact of tariffs, which will come into effect in August.
Meanwhile, the White House announced a new trade deal with Indonesia, where the Southeast Asian nation’s exporters will pay a 19% import levy for goods entering the US, while the world’s biggest economy won’t face any charges to access the smaller partner.
The antipodes
Australian futures are pointing to a 0.5% decline for the S&P/ASX 200 index when it opens today.
There’s no local data on the radar in New Zealand, while UK inflation figures and US producer prices will come overnight.
Meanwhile, Australian media reports more movement in New Zealand deals. The Australian Financial Review’s Street Talk column reported Bega Group has teamed with FrieslandCampina in its bid for Fonterra’s Mainland consumer business, while Japan’s Meji Holdings and France’s Lactalis have also lobbed in bids.
And The Australian’s DataRoom column reported Fullers360 has hired Cameron Partners as its British owner Souter Holdings weighs a sale of the tourism and transport operator.
Reporting by Paul McBeth. Image from Louis Reed on Unsplash.
