Overview of market performance across regions
Global equity markets presented a mixed picture mid-week, as investor sentiment remained heavily influenced by tech earnings and political developments in the U.S.
US markets hit new highs as S&P 500 surges
The S&P 500 reached a fresh all-time high on Wednesday, supported by a quiet trading session and persistent optimism around artificial intelligence. The Nasdaq, while strong, remained 1.3% below its peak earlier in the month.
In bond markets, shorter-term U.S. Treasury yields declined by two basis points as expectations of a Federal Reserve rate cut in September gained traction. The long end of the curve underperformed, as political pressure on the central bank continued. The dollar remained mostly steady against major currencies.
European and Asian markets show divergence
While U.S. markets climbed, European equities saw limited gains, with the Stoxx 50 and Stoxx 600 ending higher following earlier losses. France’s CAC 40 rose 0.4%, even as political concerns lingered. Chipmakers, including ASML, advanced on Nvidia’s results, while mining and consumer shares outperformed. Chemicals lagged, Givaudan slipped following leadership news, and Deutsche Bank and Commerzbank fell after receiving analyst downgrades.
In Asia, Japan’s Nikkei rose modestly, and South Korea’s KOSPI gained. India’s equities declined 1% following the U.S. decision to double tariffs on imports. Chinese indices outperformed regional peers, with the CSI 300 and Shanghai Composite advancing, even as Hong Kong’s Hang Seng was dragged lower by underperforming tech shares like Meituan.
Focus remains on tech and AI-driven earnings
With AI dominating investor narratives, earnings reports from major tech players remain in sharp focus. Below is a look at the most closely watched companies and how markets reacted.
Nvidia’s earnings beat, but forecast weighs on sentiment
Despite delivering stronger-than-expected Q2 results, Nvidia’s shares dropped 3.1% in after-hours trading. The chipmaker forecasted $54 billion in Q3 revenue but excluded Chinese sales due to export restrictions on its AI-focused H20 chip. While demand remains robust, analysts suggest expectations may have outpaced realistic growth projections.
Movers in the tech space
Several companies were on the move due to earnings announcements:
- MongoDB: Soared 38% after increasing its profit outlook.
- CrowdStrike: Reported Q2 revenue of $1.17 billion and adjusted earnings of 93 cents per share, beating expectations. However, its Q3 revenue guidance of $1.21 to $1.22 billion came in slightly below forecasts. Shares fell over 4% post-market, as costs tied to last year’s outage continued to weigh.
- Snowflake: Rose 13% on strong enterprise demand for AI and data analytics solutions. Fiscal Q2 product revenue reached $1.09 billion, in line with estimates, while remaining performance obligations grew 33% to $6.9 billion, driven by adoption across Microsoft Azure and EMEA markets.
- Meta & Microsoft: Traded mixed, with Microsoft gaining 1% and Meta slipping nearly the same amount.
- TSMC, AMD, Broadcom: Fell in sympathy with Nvidia’s cautious guidance and exclusion of Chinese sales.
Commodities and currency market update
Crude prices fell slightly in Asian trading on Thursday despite a larger-than-expected draw in U.S. inventories. Brent declined 0.5% to $67.71, and WTI was down 0.6% to $63.80, as concerns over post-summer demand and new trade tensions with India pressured markets.
Gold edged higher as political uncertainty and rate cut expectations drove safe-haven demand.
Dollar holds steady amid rate cut expectations
The U.S. dollar index hovered near 98.1, as markets priced in an 89% chance of a September rate cut. Meanwhile, the euro strengthened to 1.1648 against the dollar despite lingering political challenges in France.
Global company news and equity movers
Several global corporations reported notable developments that influenced share performance:
- Abercrombie & Fitch: Raised its 2025 sales forecast to 5 to 7% growth, supported by strong demand for Hollister dresses and denim despite higher prices. Tariffs on imports from Vietnam and India will add $90 million in costs, but inventory management aims to cushion the impact. Q2 revenue of $1.21 billion and adjusted profit of $2.32 per share exceeded estimates.
- Meituan: Tumbled 11.2% after reporting a sharp 97% profit decline to 365 million yuan, far below expectations. Heavy competition and rising costs hit its core food delivery unit. Revenue also missed forecasts, dragging the Hang Seng index lower.
- Porsche: Initiated a search for a new CEO, likely ending Oliver Blume’s dual role at Porsche and Volkswagen. The change comes amid shareholder governance concerns, weak China demand, and EV transition pressures.
- Lockheed Martin: Announced expanded missile production with Germany’s Rheinmetall, including ATACMS and Hellfire missiles. Rheinmetall will manufacture and sell in Europe, with NATO officials visiting a new artillery production line.
- Boeing & Ryanair: Boeing will deliver 25 MAX 8 jets by October, ahead of schedule. This will boost Ryanair’s capacity and allow for lower fares, despite recent strike-related flight cancellations. Ryanair is still awaiting FAA certification for its MAX 7 and MAX 10 aircraft.
- Rio Tinto: Reorganised into three core divisions, iron ore, aluminium, lithium, and copper, to simplify operations and reduce costs. Borates and titanium are undergoing a strategic review.
- Amazon Web Services (AWS): Projected to grow more than 20% by 2026, according to Morgan Stanley, driven by rising demand from generative AI workloads. The firm raised its base case valuation for Amazon to $300.
- Nike: UBS analysts see progress under new CEO Elliott Hill, citing improved franchise management and strategy. However, a full turnaround is expected to take at least a year. The stock retains a Neutral rating with a $63 price target.
- Eli Lilly: Upgraded by HSBC to Hold from Reduce, with a raised price target of $700. Analysts cited better drug prospects, particularly for its oral GLP-1 candidate or forglipron. Revenue is projected to reach $80 billion by 2027.
- Amer Sports: Upgraded to Buy by HSBC due to strong global growth and product diversification. Brands like Arc’teryx and Wilson are expanding internationally. Investors are awaiting long-term guidance at the upcoming Investor Day on September 18.
China’s push for AI chip independence
Beijing is accelerating efforts to reduce reliance on U.S. chipmakers like Nvidia. According to the Financial Times, China aims to triple AI chip output by 2026. Huawei plans to begin chip production this year, and two more plants are scheduled for completion in 2026, potentially surpassing current capacity levels at SMIC. SMIC is expected to double its 7nm output next year as domestic AI adoption increases.
Key data and earnings on the radar
Investors are gearing up for a data-heavy session, with U.S. GDP figures, Initial Jobless Claims, and Pending Home Sales due today. Earnings reports from tech giants Dell, Marvell Technology, and Autodesk are expected, along with retail names Best Buy and Dollar General.
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