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Asian shares followed Wall Street futures lower on Thursday, with investor sentiment dented by Nvidia’s (NASDAQ: NVDA) less-than-anticipated earnings results. The tech-heavy index’s slip sent ripples through global markets, causing a broader selloff in Asian equities. Meanwhile, the U.S. dollar steadied, and the Treasury yield curve approached a positive turn, signaling potential shifts in economic outlooks.
Nvidia’s Results Disappoint, Dragging Tech Stocks Lower
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.6%, driven by declines in tech stocks. Japan’s Nikkei eased 0.4%, and South Korea’s KOSPI dropped 0.7%. Despite Nvidia’s third-quarter revenue forecast of $32.5 billion exceeding Wall Street estimates, the results failed to impress the most bullish investors who had fueled the stock’s recent rally. Nvidia shares plummeted 7.6% in after-hours trading, erasing approximately $236 billion from its market value. This sharp decline weighed heavily on Nasdaq futures, which fell 1% early in Asia, while S&P futures slid 0.5%.
Nvidia’s chip contractor, TSMC, also felt the impact, with shares dropping 2.4% as the broader Taiwanese market declined by 1.3%. Investors are now contemplating whether Nvidia’s results signal a potential end to the strong enthusiasm for the chipmaker, highlighting the importance of diversification within the semiconductor sector.
China’s Economic Struggles Continue
China’s blue-chip index fell 0.4%, marking its fourth consecutive day of losses. Disappointing earnings reports from Chinese companies underscored the country’s fragile economic recovery. UBS downgraded its 2024 GDP growth forecast for China from 4.9% to 4.6%, reflecting growing concerns about the nation’s economic trajectory.
Chinese battery manufacturer CATL saw its shares drop by 2% after top U.S. Republican lawmakers proposed adding the company to a restricted list, alleging ties with Beijing’s military. Meanwhile, U.S. National Security Adviser Jake Sullivan concluded a three-day visit to Beijing aimed at easing tensions between the two superpowers.
In contrast, Chinese food delivery giant Meituan surged 7% after reporting a better-than-expected 21% increase in second-quarter revenue, offering a rare bright spot in an otherwise challenging market environment.
U.S. Data and Rate Cut Prospects Keep Markets on Edge
Investors are now turning their attention to the upcoming U.S. weekly jobless claims and inflation data from Germany and Spain, which could provide further insights into the Federal Reserve’s rate cut prospects beyond September. Fed Atlanta President Raphael Bostic hinted at the possibility of rate cuts but emphasized the need for confirmation from jobs and inflation reports before the Fed’s next meeting.
The U.S. dollar steadied after reaching more than one-year lows, with expectations of imminent Fed rate cuts weighing on the currency. Futures markets have fully priced in
