Morning report

AI Does Not Back Down

Demand for artificial intelligence computing power remained strong as Nvidia reported a +69% increase in revenue, despite recent blockages from the Trump administration. Wall Street rose only modestly. European markets fell after a failed rally sparked by news that a court had blocked President Trump’s blanket tariffs.

Nvidia quarterly earnings not enough to bolster optimism in Wall Street

Wall Street’s main benchmarks rose only modestly despite Nvidia’s +69% year-on-year increase in quarterly revenue. The DOW and NASDAQ both gained +0.2%, while the S&P 500 rose +0.3%. AI giant Nvidia added +3.0% after reporting stronger-than-expected revenue. While analyst expectations had been muted due to global trade tensions, Nvidia once again demonstrated that demand for AI remains inelastic. The company posted revenue of US$44.1 billion. Salesforce fell -3.8%, weighing on the DOW, despite raising its annual revenue and profit forecasts. Boeing gained +3.3% after its CEO announced plans to increase production of its 737 MAX aircraft to 42 units per month in the near term. In rates markets, the US two-year Treasury yield fell -5 bps to 3.95%, while the 10-year also dropped -5 bps to 4.43%.

European stock market fluctuates over mixed signals regarding Trump’s tariffs

The Stoxx 600 fell -0.2% after rising as much as +0.5% earlier in the day. London’s FTSE 100 lost -0.1%. Early gains were driven by optimism following a US court ruling that blocked President Trump’s tariffs. However, the administration has appealed the decision, and the final ruling may now fall to a Republican-majority US Supreme Court. Separately, the Court of International Trade ruled that Trump had overstepped his authority when imposing multiple tariffs on international partners.

Mixed returns in the southern hemisphere, NZ weighed on by reporting season

The ASX 200 added a modest +0.2%, supported by strength in the oil and gas sector. Crude prices rose following a US court ruling that blocked President Trump’s blanket tariffs on key trading partners. Goodman Group fell -1.4% after three investment banks lowered their target prices and recommendations on the stock. The NZX 50 lost -0.7% as the market digested earnings reports and a large sell-down in EBOS (-4.2%) by a major shareholder. Japan’s Nikkei 225 and Korea’s Kospi both gained +1.9%, leading Asian benchmarks into positive territory. Hong Kong’s Hang Seng rose +1.4%, while China’s CSI 300 and Shanghai Composite added +0.6% and +0.7% respectively.

WTI Crude and Iron Ore down, Gold up

WTI Crude fell -1.5% to US$60.90/bbl, Iron Ore also lost -0.1% to US$99.39/MT, and Gold gained +0.9% to US$3,318.70/oz.