South Korea’s Kospi index fell more than 1% as chipmakers Samsung Electronics Co. and SK Hynix Inc. fell. Japanese stocks also opened lower. Nasdaq 100 index futures fell 1% in Asia as Nvidia plunged more than 8% in after-hours trading following a sales forecast that disappointed some on Wall Street.
The outlook threatened to cool AI The frenzy that has transformed Nvidia into the world’s second-most valuable company. The chipmaker is the main beneficiary of a race to upgrade data centers to handle artificial intelligence software, and its sales forecasts have become a barometer of that spending boom.
“Nvidia’s strong results and guidance failed to impress markets, largely due to expectations rather than underperformance,” said Charu Chanana, head of FX strategy at Saxo Markets. “This disappointment may filter through to the Asian tech sector today, but there is little reason to expect a derailment in AI developments or for Nvidia to remain the backbone of AI development and deployment.”
The S&P 500 at one point was headed for its worst drop since the Aug. 5 crash. The gauge pulled away from that threshold and closed down 0.6%. Wall Street’s favorite volatility gauge, the VIX, rose to around 17. Yields on 10-year Treasury notes stabilized after rising a basis point to 3.84% in the previous session. The dollar was unchanged after gaining ground amid speculation. investors Asian investors were buying the U.S. currency to rebalance their portfolios. In Asia, investors will be keeping a close eye on Chinese stocks after the benchmark CSI 300 index fell to its lowest level since February on Wednesday amid a struggling economy. UBS Group AG cut its forecast for the country’s growth this year and next, citing a deeper-than-expected deterioration in the property market. market Chinese companies posted mixed results, though surprises are unlikely to ease concerns about what has so far been a dismal season for consumer-facing companies. Electric-vehicle giant BYD posted a 33% rise in profit, while rival Li Auto Inc. missed forecasts. Meituan reported better-than-expected revenue.
Separately, Nippon Steel Corp. plans to invest an additional $1.3 billion in plants operated by United States Steel Corp. as the Japanese company steps up efforts to secure union support for a takeover bid that has been opposed by both President Joe Biden and Donald Trump.
Is the bar too high?
While Nvidia’s forecasts weren’t the best, revenue more than doubled to $30 billion in the fiscal second quarter, which ended July 28. And the Santa Clara, California-based company’s board approved an additional $50 billion in share buybacks.
Later on Thursday, investors will turn their attention to key U.S. data including growth, personal consumption and weekly jobless claims, which will help bolster bets that the Federal Reserve will ease monetary policy quickly this year. Federal Reserve Bank of Atlanta President Raphael Bostic said “it may be time to cut,” but he still expects additional data to support a rate cut next month.
In commodities, oil steadied after two days of declines as technical barriers curbed gains from declining U.S. stocks and production disruptions in Libya. Gold recouped some of Wednesday’s loss in early trading.
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