Steady open for European indices

Nvidia shares slipped after hours on Wednesday despite reporting second-quarter results that topped Wall Street’s expectations. The company’s Q2 performance exceeded consensus on both earnings and revenue, but disappointment centred on its data centre revenue, which fell short of estimates for the second consecutive quarter. This miss weighed heavily on sentiment, given Nvidia’s role as a key driver in the AI boom.

The stock fell around 3% in after-hours trade. Nvidia accounts for roughly 8% of the S&P 500. Yet the disappointment was relatively contained. While other chip manufacturers also sold offwith AMD, Taiwan Semiconductor, and Broadcom all slipping around 1%in sympathy, the broader market was unaffected.

Source: TN Trader

It’s interesting that the sell-off in Nvidia’s stock failed to spread outside the chipmaking sector. Expectations were high going into last night’s earnings release. And with Nvidia accounting for such a large chunk of the S&P’s market capitalisation (8%), investors may have been spooked by the world’s first $4 trillion company announcing a slowdown in data centre revenue.

The S&P 500 hit a fresh all-time intra-day high overnight, suggesting that investors will need something far more concerning than last night’s numbers for them to consider cutting their exposure to US equities.

Source: TN Trader

Asian Pacific stock indices posted a mixed close on Thursday. Japan’s Nikkei rose 0.7%, boosted by news that Warren Buffett increased his stakes in Mitsubishi and Mitsui. Australia’s ASX 200 closed 0.2% higher. 

Notable corporate news included Lynas Rare Earths, which raised A$750 million in capital at a 10% discount to fund expansion and exploration. Qantas Airways surged to a record high after reporting a 15% jump in underlying profit before tax, which was a touch above estimates, while revenues rose 8.6% year-over-year. 

The Shanghai Composite gained 0.8%, but in contrast, Hong Kong’s Hang Seng fell 0.9%, pressured by weak corporate earnings.

Forex markets were relatively subdued overnight. The US dollar was a touch weaker against ‘safe haven’ favourites, the Japanese yen and Swiss franc. But otherwise, the greenback was little changed against other majors. Yesterday, the Dollar Index fell back below 98.00. But it remains rangebound and comfortably above July’s low when it briefly broke below 96.00.

Traders will keep a close eye on some major data releases that are coming up. Today, there is the first update to the second quarter GDP, along with weekly Unemployment Claims. Tomorrow, we will see an update to Core PCE, the Fed’s preferred inflation measure.

Source: TN Trader

India’s Nifty 50 fell 0.6%, hitting a two-week low as markets reopened from Wednesday’s holiday. The move reflects investor concerns after President Trump imposed 50% tariffs on select Indian goods, a punitive measure in response to India’s continued purchases of Russian oil. These tariffs represent the steepest duties across Asia, raising fears of trade disruption and broader economic consequences for India.

Oil prices were little changed in early trade this morning, with front-month WTI seeing a high-low range of less than 50 cents so far. This followed a relatively subdued session on Wednesday, which picked up a touch after the release of US inventory data from the Energy Information Administration. This showed a bigger-than-expected drawdown in US crude oil stockpiles.

Oil rallied on the news in a move which saw front-month WTI briefly top $64 per barrel, having traded below $63 earlier in the session. Over the past week, Russia and Ukraine have both attacked each other's energy infrastructure, while the Trump administration has levied a 50% tariff on selected imports from India. But the medium-to-long-term driver for oil prices is the extent to which supply and demand are in balance.

Source: TN Trader

As things stand, the market remains well supplied, while demand growth continues to slow. Yet in the short-term, it’s hard to make either a bullish or bearish argument for prices, particularly as both the daily and four-hour (see below) MACDs show a market which is neither overbought nor oversold.

Gold has made steady gains since early last week when it came close to breaking below $3,300. It is now trading either side of $3,400 and finding some support from mounting bets of a 25-basis point rate cut at the Fed’s monetary policy meeting next month. Investors are keeping a close eye on the US dollar, which is currently influencing gold prices to some extent.

In this regard, the upcoming data releases, which include weekly Unemployment Claims and an update to second quarter GDP today, and Core PCE (the Fed’s preferred inflation measure) tomorrow, should keep traders on their toes. The probability of a rate cut in September has crept up to 87% this morning from 71% ahead of Fed Chair Jerome Powell’s Jackson Hole speech last Friday.

As can be seen in the chart, gold remains rangebound while the daily MACD trends around the neutral zone. It is in desperate need of a catalyst for prices to break out, in either direction.

Source: TN Trader

Silver was firmer in early trade this morning and once again closing in on $39 per ounce. The daily MACD has come down from overbought levels and has started to curl up. This appears to be a positive development.  But like gold, silver is a market in need of a catalyst.

Source: TN Trader

Bitcoin has picked up a touch since Tuesday, when it traded at its lowest level since early July. While it briefly dipped below $110,000, the area around here appears to be offering some support. Meanwhile, Ether looks to be consolidating gains around $4,500 and remains within sight of its all-time high from the weekend, just below $5,000.

Volatility expectations moderated slightly in early trade, indicating that risk appetite remains strong with investors and traders alike. The VIX fell sharply after Fed Chair Jerome Powell’s speech at Jackson Hole last Friday. This was interpreted as more dovish than expected, essentially teeing up a 25-basis point rate cut at the next Fed meeting, which concludes on 17th September.

What investors appear to be overlooking is President Trump’s continued meddling in the US central bank’s affairs, thereby threatening its independence. This could end up being a far more serious issue.