Nvidia Powers Stock Gains Ahead of Fed Rate Call: Markets Wrap
(Bloomberg) — Technology stocks kept driving global equities higher as hopes for a breakthrough by Nvidia Corp. in China reinforced optimism about artificial intelligence ahead of a likely Federal Reserve interest-rate cut.
The S&P 500 looked set to extend its record rally, with futures up 0.2%. Nvidia Corp. rose more than 3% premarket, setting the AI powerhouse on course to become the first public company worth $5 trillion. US President Donald Trump raised expectations of a deal allowing Nvidia to export a version of its Blackwell processor to China.
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The technology sector remains at the center of market attention, with Microsoft Corp., Alphabet Inc., Meta Platforms Inc., Amazon.com Inc. and Apple Inc. all set to report results within the next two days. The so-called “Magnificent Seven,” which also include Tesla Inc. and Nvidia, are projected to post third-quarter profit growth of 14%, nearly double the 8% expected for the broader S&P 500.
Meanwhile, the Federal Reserve is widely seen lowering interest rates by a quarter point later Wednesday, with policymakers emphasizing support for the labor market. Traders will also watch for signals on when officials may halt the runoff of the Fed’s balance sheet.
“The story of AI is still intact,” said Anthi Tsouvali, a multi-asset strategist at UBS Global Wealth Management. “The fact that the Fed is cutting rates — and we do expect that the Fed will cut another 25 points — is very good for the economy. It’s easing financial conditions, boosting growth.”
US Treasuries slipped across the curve as traders cautioned that any hawkish remarks from Fed Chair Jerome Powell could spark fresh volatility. Yields have largely held in a narrow range in recent days amid a data lull caused by the US government shutdown.
The 10-year yield rose one basis point to 3.99%, while the dollar snapped a two-day losing streak.
“The decisive factor will be Powell’s press conference and how he assesses the current situation with regard to the labor market, because we are not getting any real data at the moment due to the government shutdown,” said Unicredit strategist Christian Stocker. “The economy will continue to develop solidly if we get some interest rate cuts next year. That would certainly be very, very decisive for the stock market.”
Europe’s equity benchmark was on track for another record close as mining stocks advanced after copper hit an all-time high on the London Metal Exchange. The metal — a bellwether for global growth — has surged as the US and China move closer to a trade deal. Gold climbed back above $4,000 an ounce, while Brent crude oil edged toward $65 a barrel.
Automakers gained after Mercedes-Benz Group AG’s upbeat earnings signaled confidence in its cash generation despite trade hurdles.
Among other movers in Europe, Glencore Plc rose after saying it’s on track to hit full-year production targets. Banco Santander SA and Deutsche Bank AG gained after earnings beats. Adyen NV surged after the payments solutions company exceeded analysts’ revenue estimates. UBS Group AG fell on legals risks arising from a Swiss court ruling.
Meanwhile, Trump said he expects to lower tariffs the US imposed on Chinese goods over the fentanyl crisis as leaders of the world’s biggest economies seek to ease tensions in a meeting on Thursday.
The Wall Street Journal reported Tuesday Trump was considering cutting the 20% tariff to 10% on Chinese goods over fentanyl. In another sign of easing tensions, China bought at least two cargoes of US soybeans, its first known purchase this season.
In other trade news, Trump said he had reached a deal with South Korea, though he later tempered the comment by saying the agreement was close to being finalized. Futures on South Korea’s Kospi 200 stock index rose.
Despite Wednesday’s gains and a broadly positive outlook for equities, some analysts flagged the narrow breadth of the rally. While the Stoxx 600 advanced, more than half of its members declined — mirroring Tuesday’s pattern in the S&P 500.
“From an investment standpoint, while the narrative for US equities remains ‘bullish with conviction,’ sustaining this uptrend will require patience and disciplined risk management,” wrote Linh Tran, market analyst at XS.com. “Monetary policy decisions, trade developments, and corporate earnings are set to become the key catalysts driving the next phase of the market.”
In other earnings and corporate news:
Verizon Communications Inc., the US’ largest mobile-service provider, lost wireless phone subscribers in the third quarter, highlighting the first major challenge for new Chief Executive Officer Dan Schulman. Centene Corp. shares jumped premarket after third-quarter profit surpassed Wall Street expectations and the health insurer raised its outlook, a potential sign of relief for investors after the company’s profit view collapsed earlier this year. Caterpillar Inc. posted higher third-quarter revenue, with its energy and transportation business boosting earnings amid rising demand for equipment needed to fuel data centers for artificial intelligence. The shares rose premarket. Fiserv Inc. shares plunged after the fin-tech firm slashed its outlook for full-year earnings and said it’s overhauling its top leadership committee. Kraft Heinz Co. lowered its sales outlook in a sign of increasing weakness among US consumers as the maker of Kraft Mac & Cheese and Heinz ketchup prepares to split up its business. Boeing Co. announced a $4.9 billion accounting charge and delayed debut for its 777X jetliner, a reminder of the long recovery ahead for the US plane maker even as rising aircraft deliveries bolster its cash. Paramount Skydance Corp. began a planned round of job cuts involving 1,000 workers on Wednesday as part of an effort to slash $2 billion in costs following its August merger with Skydance Media. Thermo Fisher Scientific Inc. agreed to buy clinical trial data firm Clario Holdings Inc. for $8.875 billion in cash, expanding its digital and AI-driven capabilities in drug development. Aston Martin Lagonda Global Holdings Plc is reviewing plans for upcoming models to lower costs, with US tariffs hitting the British carmaker as its latest turnaround effort stalls. GSK Plc raised its profit and sales forecasts for the year, aided by its HIV and immunology medicines, in Emma Walmsley’s last report as chief executive officer. Mercedes-Benz Group AG confirmed its annual outlook and plans to proceed with a €2 billion ($2.3 billion) share buyback after the company’s automaking margin climbed in the third quarter. BASF SE said growing chemicals demand and rising auto production in China are helping to offset weakness elsewhere due to trade uncertainties. A share rally at BBVA SA following its failed attempt to take over a smaller Spanish rival has vaulted the lender’s market value past €100 billion ($116 billion). ASM International NV shares rose after the chip-equipment company’s forecast for order growth next year reassured investors that a sales slump is set to end. Some of the main moves in markets:
Stocks
S&P 500 futures rose 0.2% as of 8:26 a.m. New York time Nasdaq 100 futures rose 0.4% Futures on the Dow Jones Industrial Average rose 0.1% The Stoxx Europe 600 rose 0.3% The MSCI World Index was little changed Currencies
The Bloomberg Dollar Spot Index rose 0.1% The euro fell 0.1% to $1.1636 The British pound fell 0.5% to $1.3205 The Japanese yen was little changed at 152.26 per dollar Cryptocurrencies
Bitcoin rose 0.3% to $113,160.14 Ether rose 0.7% to $4,008.04 Bonds
The yield on 10-year Treasuries advanced one basis point to 3.99% Germany’s 10-year yield was little changed at 2.62% Britain’s 10-year yield declined one basis point to 4.39% Commodities
West Texas Intermediate crude fell 0.1% to $60.08 a barrel Spot gold rose 1.9% to $4,028.63 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Anand Krishnamoorthy.
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