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US Futures Slip With Nvidia Earnings in Spotlight: Markets Wrap


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US Futures Slip With Nvidia Earnings in Spotlight: Markets Wrap

(Bloomberg) — Global stocks slipped on Tuesday ahead of earnings from Nvidia Corp. and amid signs of sticky inflation that dampened bets on early interest-rate cuts.

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Futures on the Nasdaq 100 and S&P 500 indexes retreated about 0.2%, while Europe’s Stoxx 600 gauge slipped 0.3%, with energy shares among the big losers amid a drop in crude prices. Sentiment was also dented by data showing *** inflation slowed less than expected last month, raising questions about when the Bank of England can start cutting interest rates.

All eyes now turn to artificial intelligence bellwether Nvidia, which was down 0.6% in thin premarket New York trading. It’s projected to report a 243% gain in revenue, according to Wall Street estimates, but its 90% year-to-date share rally sets a high bar for further gains. Shares have hit a fresh record high this week ahead of the result, seen as the grand finale for a robust US earnings season.

“Nvidia ******** the focal point,” Pepperstone Group Ltd. strategist Chris Weston said, noting that options markets are pricing a 7% to 9% swing in the stock after the result.

While Nvidia’s sales and ****** margins will grab the initial spotlight, “it’s the guidance on the earnings landscape and product roll-out from CEO Jensen Huang that could dictate if the market really wants to push this one along for a more sustained *******,” Weston said.

Markets are also growing jittery about the prospect of stubbornly high inflation that could prevent central banks from easing policy as early as currently anticipated.

The *** inflation figures lifted the pound and knocked bond prices across Europe as traders pushed back their expected timing for the first Bank of England rate cut. Earlier on Wednesday, the Reserve Bank of New Zealand kept interest rates unchanged and signaled policy will stay tight for longer, while Federal Reserve Governor Christopher Waller said on Tuesday he needs to see several more good inflation numbers to begin interest-rate cuts.

“Both the RBNZ and the *** inflation data highlight the fraught nature of the current juncture, with investors struggling to gauge both the timing and extent of long-awaited central bank easing cycles,” Rabobank’s head of rates strategy, Richard McGuire, said.

Inflation concerns have also been revived by the latest bout of strength in metals and grains prices, with Bloomberg’s spot commodity index holding near a 16-month peak. On Wednesday, gold, silver and copper eased off recent record highs.

Traders have dialed down expectatons for Fed interest rate cuts this year, currently seeing around 40 basis points of rate cuts in 2024, versus the 50 basis-point reduction priced last week. Minutes of the last Fed policy meeting, due later Wednesday, could offer further clues on rate-setters’ thinking.

Among individual stock movers, shares in Anglo ********* Plc weakened. as investors waited to see if rival BHP Group Ltd. would launch its takeover bid to create a global copper behemoth. BHP has a deadline of 5 p.m. London time to announce a firm intention to make an offer for what could be among the world’s biggest takeover deals this year.

In New York premarket trading, Lululemon Athletica Inc. dropped as much as 4% after announcing organizational changes, while Tesla Inc. slid after disclosing ********* sales fell to a 15-month low in April.

Key events this week:

  • US existing home sales, Wednesday

  • Fed minutes, Wednesday

  • Nvidia earnings, Wednesday

  • Eurozone S&P Global services and manufacturing PMIs, consumer confidence, Thursday

  • G-7 finance meeting, May 23-25

  • US new home sales, initial jobless claims, Thursday

  • Fed’s Raphael Bostic speaks, Thursday

  • US durable goods, consumer sentiment, Friday

  • Fed’s Christopher Waller speaks, Friday

Some of the main moves in markets:

Stocks

  • S&P 500 futures fell 0.2% as of 6:38 a.m. New York time

  • Nasdaq 100 futures fell 0.2%

  • Futures on the Dow Jones Industrial Average fell 0.1%

  • The Stoxx Europe 600 fell 0.3%

  • The MSCI World Index fell 0.1%

Currencies

  • The Bloomberg Dollar Spot Index was little changed

  • The euro fell 0.1% to $1.0841

  • The British pound rose 0.1% to $1.2727

  • The ********* yen fell 0.2% to 156.43 per dollar

Cryptocurrencies

  • Bitcoin rose 0.6% to $70,108.23

  • Ether fell 0.2% to $3,738

Bonds

  • The yield on 10-year Treasuries advanced three basis points to 4.44%

  • Germany’s 10-year yield advanced three basis points to 2.53%

  • Britain’s 10-year yield advanced nine basis points to 4.22%

Commodities

  • West Texas Intermediate crude fell 0.5% to $78.27 a barrel

  • Spot gold fell 0.2% to $2,415.64 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Winnie Hsu.

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©2024 Bloomberg L.P.





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