Wall Street nudged lower as the US-China relationship stayed top of mind for investors, with President Donald Trump extending the tariff deadline on the world’s second biggest economy, and cutting a deal with Nvidia and Advanced Micro Devices to get a slice of the firms’ sales of artificial intelligence chips to China.
Meanwhile, gold futures prices declined after Trump ended speculation he plans to slap a tariff on the precious metal by taking to his Truth Social account to say: "Gold will not be Tariffed!"
Across the Atlantic, stock markets were mixed with European defence companies on the red side of the ledger ahead of Trump’s upcoming meeting with Russian President Vladimir Putin to seek a peace deal in Ukraine, while London rallied with financial stocks leading the charge.
And the Reserve Bank of Australia is expected to cut its target cash rate at today’s policy meeting, although futures are pointing to a soft start to the day for the S&P/ASX 200 index.
US-China relations
US President Donald Trump extended the deadline for imposing higher tariffs on China until Nov 9, pushing out the timeline for the superpowers to continue trade negotiations that were set to end on Tuesday.
The looming deadline had been top of mind for investors, with the White House separately reaching a deal with Nvidia and AMD for the chipmakers to paying the federal government 15% of their revenue from sales of AI chips to China. Both companies were up 0.1% in late trading.
“The move is controversial, as chip sales to China were previously banned on national security grounds, something that is now being ignored, while so-called ‘export taxes’ are also illegal under the US Constitution, so a legal battle could follow,” Bank of New Zealand senior markets strategist Jason Wong said in a note. “If this policy direction seems alarming to some, the market shows no sign of concern.”
The S&P 500 was down 0.1% in late trading, as was the tech-heavy Nasdaq.
Salesforce and IBM were at the bottom of the leaderboard for the Dow Jones Industrial Average, which declined 0.4%.
Smackdown
Meanwhile, TKO rallied 8% after the entertainment firm cut a seven-year, US$7.7 billion deal with SkyDance’s Paramount for the exclusive rights for all UFC fights in the US, and cinema operator AMC Entertainment gained after beating analysts’ expectations in its June quarter.
Cinema analytics firm Vista Group International, which counts AMC’s Odeon Cinema Group as a customer, is due to report on Thursday.
Across the Atlantic, the UK’s FTSE 100 index gained 0.4% with life insurers helping drive financial stocks higher, while Germany’s DAX 30 declined 0.3% and France’s CAC 40 fell 0.6% as defence companies were softer ahead of Trump’s meeting with Russian President Vladimir Putin to seek a peace plan for Ukraine.
Gold futures fell 2.4% to US$3,406 an ounce after Trump quashed speculation he planned to impose a tariff on bullion, saying he won’t tax gold in a post on his Trust Social platform, without providing any details.
The downbeat tone is weighing on the outlook for the antipodes, with Australian futures pointing to a 0.2% on the ASX 200 when trading opens, while the kiwi dollar slipped to 59.39 US cents at 7am in Auckland from 59.50 cents.
Meanwhile, the RBA’s policy review today is expected to deliver a 25 basis point cut to the target cash rate, taking it to 3.6%. New Zealand’s Reserve Bank reviews the official cash rate next week and is expected to follow suit.
Rural services firm PGG Wrightson is due to report its annual result today, having upgraded the outlook on a strong end to the year.
Reporting by Paul McBeth. Image from Freeman Zhou on Unsplash.
