European stock futures saw modest gains as investors awaited US employment data, which is expected to offer further insights into the Federal Reserve’s potential path for interest rate cuts. Contracts for the Euro Stoxx 50 rose by 0.3%, diverging from the downward trend in Asia, where concerns about the AI-chip sector and geopolitical risks dampened investor sentiment. A broader Asian equities index fell by 0.4%, with major technology stocks, particularly in China and Korea, acting as significant drags. Indian markets also struggled, with shares of the Adani Group plummeting after US authorities indicted Gautam Adani over an alleged bribery plot.
Nvidia Corp.’s disappointing revenue outlook sent ripples through its supplier network, particularly in Asia, given Nvidia’s pivotal role in the booming artificial intelligence sector. Meanwhile, tensions escalated with Ukraine’s unprecedented use of British-made cruise missiles on military targets inside Russia, adding further uncertainty to global markets.
“Despite strong results from Nvidia, the company still fell short of the market’s high expectations,” noted Charu Chanana, chief investment strategist at Saxo Markets. “Asian stocks are also grappling with risk-off sentiment as the Russia-Ukraine conflict looms large.”
In the bond market, US Treasury yields edged lower as traders anticipated the release of initial jobless claims data and awaited more clarity on President-elect Donald Trump’s Treasury secretary nominee. Meanwhile, the dollar index slipped after a modest gain on Wednesday.
Bitcoin surged to a new all-time high of $97,000, fueled by ongoing discussions within Trump’s team about potentially creating a new White House position focused on cryptocurrency policy.
In Asia, semiconductor stocks were under pressure. Taiwan Semiconductor Manufacturing Co. saw its shares fall by as much as 1.5%, while Korea’s SK Hynix, a key Nvidia supplier, dropped 1.4%. Indian equities also faced turmoil, with Adani Group stocks falling sharply in Mumbai. The conglomerate was forced to cancel a $600 million bond sale after US prosecutors filed charges against Adani for allegedly orchestrating a bribery scheme to secure solar energy contracts with Indian government officials.
In other news, Starbucks Corp. is considering strategic options for its Chinese operations, including the potential sale of a stake in the business. Japan’s Prime Minister Shigeru Ishiba is preparing to announce a $140 billion economic stimulus package to tackle inflationary pressures and wage growth challenges. Meanwhile, the Japanese yen appreciated by 0.6% against the dollar after comments from Bank of Japan Governor Kazuo Ueda, who expressed concerns about the foreign exchange impact on Japan’s economy and inflation.
Federal Reserve Bank of Boston President Susan Collins signaled the need for additional interest rate cuts but emphasized the importance of a measured approach to avoid overcorrecting. Market expectations suggest there is less than a 50% chance of a rate cut in December, as the Fed navigates the ongoing economic recovery.
Traders are also closely monitoring President Trump’s key administration appointments, particularly his choice for Treasury secretary. Former Federal Reserve Governor Kevin Warsh and Apollo Global Management’s Marc Rowan are reportedly among the top contenders for the role.
“As we look at the Treasury secretary race, it’s critical to understand the relationship between the nominee and the Federal Reserve, as fiscal and monetary policy will intersect rapidly,” said Ed Mills, Washington policy analyst at Raymond James.
Gold extended its gains for the fourth consecutive day, supported by investor appetite for safe-haven assets amidst geopolitical uncertainties. Oil prices held steady, with the market closely watching developments in Ukraine and the Middle East, especially after a third consecutive week of rising US crude stockpiles.
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