Nvidia Surges After 70% Revenue Forecast, Hugging Face Deal

Summary

Nvidia shares jumped in after-hours trading after the chipmaker forecast a 70% revenue jump for its next fiscal year and reportedly agreed to buy AI platform Hugging Face for $12.9 billion. The news lifted Asian chip-linked stocks, with South Korea's KOSPI climbing sharply even as it shrugged off a Bank of Korea rate hike. Gold extended its rally, while bitcoin and ether also gained as "dollar debasement trades" continued to build momentum. Brent crude slipped for a fourth straight session amid renewed U.S.-Iran peace talk efforts.

Equities

The FTSE 100 edged 0.07% lower to 10,878.12 on Wednesday, ending a run of six consecutive sessions of gains. Healthcare and energy shares weighed on the blue-chip index, while the FTSE 250 gained 0.17%.

Sage Group was one of the weakest large UK stocks on Wednesday, falling 3.76%. Experian and Relx also declined, losing between 1.22% and 1.4%, while British American Tobacco, Imperial Brands and Unilever moved higher and helped limit the FTSE 100’s decline.

Healthcare stocks fell 1.18% on Wednesday and energy shares dropped 0.67% as oil prices edged lower. In the FTSE 250, Hochschild Mining climbed 5.4% after the precious metals miner reported that first-half revenue had increased 62% compared with the previous year.

US stocks also closed slightly lower on Wednesday. The Dow Jones fell 0.21% to 53,463.88, the S&P 500 slipped 0.02% to 7,675.70 and the Nasdaq Composite declined 0.08% to 26,130.20. US annual inflation increased 3.7% in July, slightly above expectations, while investors were waiting for Nvidia’s quarterly results after the closing bell.

Nvidia shares fell 1.6% during Wednesday’s session ahead of its closely watched results, with investors looking for further evidence about demand for AI chips. Intuit dropped 3.2% after the TurboTax owner forecast annual revenue below Wall Street expectations.

Moderna fell 5.8% on Wednesday, reversing some of Tuesday’s strong gains following the release of late-stage cancer vaccine trial data last week. By contrast, J.M. Smucker gained 4.3% after forecasting a smaller-than-expected decline in annual sales.

Meta rose almost 1.1% after agreeing to pay up to $18 billion and make changes to Facebook and Instagram to settle US states’ claims relating to harm to children. Apple also gained 1.1%, while CrowdStrike rose 2% ahead of its second-quarter results after Wednesday’s closing bell.

Forex & Commodities

The US dollar was steady early this morning, with the dollar index at 99.12 after giving back gains from an eight-day high. The euro strengthened to $1.166, while the British pound traded at $1.359 and the Australian dollar rose to $0.7183.

The Japanese yen was little changed at 159.3 per US dollar early this morning following comments from Bank of Japan Deputy Governor Ryozo Himino. Himino said timely interest rate increases could help prevent an inflation spike that might require more abrupt tightening later, but stopped short of clearly signalling a September increase. Money markets were pricing an 86% probability of a BOJ rate rise next month.

Spot gold rose early this morning to $4,619 an ounce, extending gains after climbing more than 5% last week. Markets were pricing a 38.1% probability of a US interest rate increase in September and a 73.6% chance of an increase by December, with Warsh’s comments expected to provide further guidance on the Fed’s outlook.Oil prices fell again early this morning as expectations increased that diplomatic talks could lead to the Strait of Hormuz reopening and reduce disruption to Gulf supplies. Brent crude declined to $87.43 a barrel, putting it on course for a fourth consecutive daily fall, while West Texas Intermediate dropped to $81.86 and was heading for a fifth straight decline.