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Global equities retreat ahead of Nvidia earnings

Equity markets across the US, Europe and Asia continued to decline midweek, as investor caution intensified ahead of US chipmaker Nvidia’s quarterly results due later Wednesday. Persistent uncertainty surrounding Federal Reserve (Fed) policy added to market jitters. Meanwhile, Gold prices bounced back a bit from a recent fall, trading around USD 4090 per ounce, and bitcoin was trading around USD 91,300 after shortly falling below USD 90,000. US Treasury yields were hovering around 3.6% for the 2-year and 4.1% for the 10-year.

  • Date
  • Author Shane Strowmatt, Senior Investment Writer
  • Reading time 5 minutes

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Asian equities mostly declined on Wednesday as investors grew cautious ahead of key earnings from US chipmaker Nvidia later on Wednesday. Technology sector shares remained under pressure throughout the region. Japan’s Nikkei 225 was trading 0.3% lower at a one-month low, impacted by worries over Japan’s fiscal situation and diplomatic strains with China. Korea’s Kospi dropped 0.6%. Australia’s S&P/ASX 200 was down 0.3%, while Hong Kong’s Hang Seng Index was also trading 0.3% lower. Xiaomi shares led losses on the Hang Seng, dropping after a mixed third-quarter update and warning of pressure on smartphone margins due to rising memory chip costs. In contrast, mainland China’s CSI 300 was up 0.7%. While markets in mainland China were steadier given limited tech exposure, investors across Asia continue to scale back expectations for a US rate cut in December, contributing to a cautious trading environment.

US shares fall further amid Fed uncertainty

US equities fell sharply on Tuesday, with the Dow Jones Industrial Average dropping 1.1% to its lowest level since mid-October, erasing nearly 5% since last week’s record high. The S&P 500 was down 0.8%, while the Nasdaq 100 lost 1.2%, reflecting souring investor sentiment as concerns linger about the US economic outlook and future Fed rate moves. The CBOE Volatility Index (VIX), a measure of market fear, surged 10.3% on Monday, underscoring rising nervousness. Shares in retailer Home Depot declined 6% after disappointing third-quarter earnings and a lowered annual forecast, while pharmaceutical group Merck & Co led gains with a 3.8% rise on positive clinical data.

Mixed US macroeconomic data

New orders for US-manufactured goods increased by 1.4% in August, recovering from a 1.3% decline in July, according to data released by the Commerce Department on Tuesday. Orders were up 3.3% compared to the same period last year, although business spending on equipment was softer than previously estimated, with non-defence capital goods orders excluding aircraft rising 0.4%. The report was delayed due to a record 43-day government shutdown, which has also disrupted broader economic data releases. US manufacturing continues to face headwinds from ongoing tariffs, highlighted by the Institute for Supply Management’s manufacturing Purchasing Managers' Index (PMI), which has contracted for eight consecutive months. Meanwhile, US homebuilder sentiment edged up by one point to 38 this month, remaining below the 50 breakeven level for the nineteenth consecutive month, according to data published on Tuesday. Persistent labour market concerns and stretched household finances contributed to muted demand.

European equities extend sell-off

European stock markets accelerated their decline on Tuesday, with the euro area’s EuroStoxx 50 index falling 1.9% for its steepest daily loss since early August and now nearly 5% below last week’s record high. Uncertainty over economic prospects in the US and the future of Fed policy weighed heavily on sentiment, particularly impacting technology stocks and sectors such as autos, banking, and industrial goods. Switzerland’s SMI slipped 1% despite strong gains from pharmaceutical giant Roche, which rose 6.2% on promising breast cancer drug trial results. Germany’s DAX slid 1.8%, and France’s CAC 40 retreated 1.9%.

Corporate and economic calendar

Corporate news in focus: Quarterly figures from Deere & Company, Lowe's, Nvidia, TJX.

Economic data in focus: UK Consumer Price Index (08:00), euro-area Consumer Price Index (11:00), US building permits (14:30), US trade balance (14:30) and Federal Reserve monetary policy meeting minutes (20:00).

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Editor: Alessandro Fezzi
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