US eked mild gains heading into NVIDIA earnings although futures then wobbled despite the AI darling beating on top and bottom lines - Newsquawk Asia-Pac Market Open

• US stocks were ultimately bid in which the Russell 2000 outperformed and the S&P 500 printed a fresh intraday record high, while sectors were predominantly firmer with Energy leading the advances, although Communication lagged. Tech was also bid ahead of NVDA earnings after-hours, and T-notes continued to steepen with focus on Fed independence, while there were comments from Fed Williams who was somewhat dovish and thinks that it will be appropriate to reduce rates over time but will have to watch the data. Nonetheless, futures briefly wobbled after-hours as NVIDIA shares were pressured post-earnings despite beating on top and bottom lines, as its revenue guidance was not as strong as some were hoping for and with questions remaining regarding chip sales to China.
• USD traded mixed and the DXY was ultimately flat as early upside against the EUR and JPY was offset by weakness vs CAD, GBP and CHF, while market-moving events were sparse for the buck and the attention now turns to data including Q2 GDP and Initial Jobless Claims on Thursday, followed by the latest PCE data on Friday.
• Looking ahead, highlights include New Zealand ANZ Business Confidence, Australian Private Capital Expenditure, BoK Rate Decision, Comments from BoJ's Nakagawa, Supply from Australia & Japan.

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LOOKING AHEAD

• Highlights include New Zealand ANZ Business Confidence, Australian Private Capital Expenditure, BoK Rate Decision, Comments from BoJ's Nakagawa, Supply from Australia & Japan.
• Click for the Newsquawk Week Ahead.

US TRADE

• US stocks were ultimately bid in which the Russell 2000 outperformed and the S&P 500 printed a fresh intraday record high, while sectors were predominantly firmer with Energy leading the advances, although Communication lagged. Tech was also bid ahead of NVDA earnings after-hours, and T-notes continued to steepen with focus on Fed independence, while there were comments from Fed Williams who was somewhat dovish and thinks that it will be appropriate to reduce rates over time but will have to watch the data. Nonetheless, futures briefly wobbled after-hours as NVIDIA shares were pressured post-earnings despite beating on top and bottom lines, as its revenue guidance was not as strong as some were hoping for and with questions remaining regarding chip sales to China.
• SPX +0.24% at 6,481, NDX +0.17% at 23,566, DJI +0.32% at 45,565, RUT +0.64% at 2,374.
• Click here for a detailed summary.

TARIFFS/TRADE

• US Treasury Secretary Bessent said he guesses he will meet with China's vice-premier in late-October/early November, and everything is on the table in China trade talks, according to Fox Business.
• Mexican President Sheinbaum said Mexico has achieved a good framework for a US security deal, and US Secretary of State Rubio will be coming to Mexico soon.
• Brazil's Finance Minister Haddad said Brazil will challenge tariffs in US courts, not via lobbying, while he added that heads of state are insecure about the US, not knowing what tomorrow will bring.
• India is reportedly hopeful that the US will review the 25% penalty for the purchase of Russian oil, while the Indian government was to hold talks with exporters to diversify shipments to other markets, according to Reuters sources. It was also reported that India’s government aims to tap free trade agreements signed with the UK, EFTA and others, according to government sources.

NOTABLE HEADLINES

• Fed’s Williams said he has nothing to say on allegations and the situation around Governor Cook, while he added that Fed independence is extremely important. Williams said the labour market remains solid but noted they have seen a slowdown in the supply of labour and slowing demand, as well as a slowdown in the pace of hiring. Furthermore, he said they are still in a modestly restrictive stance and every meeting is a live meeting, and that the Fed has to be driven by data, while he added the Fed could reduce interest rates and still be somewhat restrictive.
• US Treasury Secretary Bessent reiterated there are 11 strong Fed chair candidates, while will start interviews after Labor Day and present a shortlist to President Trump. Bessent also commented that he does not think (NVDA) needs financial support and the government may take stakes in other areas like shipbuilding, while he does not know if they need to take stakes in defence companies.
• NVIDIA Corp (NVDA) Q2 2026 (USD): Adj. EPS 1.05 (exp. 1.00), Revenue 46.74bln (exp. 45.51bln). Q3 revenue view 54bln (exp. 53bln), announces additional USD 60bln buyback; Co. shares fell 1.9% after-market.

FX

• USD traded mixed and the DXY was ultimately flat as early upside against the EUR and JPY was offset by weakness vs CAD, GBP and CHF, while market-moving events were sparse for the buck and the attention now turns to data including Q2 GDP and Initial Jobless Claims on Thursday, followed by the latest PCE data on Friday.
• EUR was marginally softer on the day after recovering most of the losses seen during the European morning in which EUR/USD briefly dipped beneath the 1.1600 handle, with the single currency not helped by the further deterioration in German Consumer Sentiment.
• GBP rebounded from an early dip and briefly returned to above the 1.3500 level with two-way price action seen amid a lack of fresh catalysts.
• JPY gradually recovered initial losses with USD/JPY returning to flat territory after failing to sustain a brief reclaim of the 148.00 status.

FIXED INCOME

• T-notes extended on gains and the curve further steepened, with little data to focus on, and as bond traders continued to digest the Trump v Fed debacle.

COMMODITIES

• Oil prices rebounded from Tuesday's sell-off as further sanctions on Iran loom and following the larger-than-expected EIA weekly crude draw.
• US EIA Weekly Crude Stocks w/e -2.392M vs. Exp. -1.863M (Prev. -6.014M).
• Hungarian Foreign Minister said deliveries to Hungary via the Druzhba pipeline can resume on Thursday in test mode at lower volumes.
• BHP's Chilean Escondida mine union reported a safety risk after accidents with autonomous trucks.

GEOPOLITICAL

MIDDLE EAST

• German government spokesperson said that triggering snapback by E3 remains an option after the meeting between France, Britain, and Germany with Iran in Geneva.
• Europeans are likely to initiate the UN process to reimpose sanctions on Iran on Thursday, although the process takes 30 days and there is scope for further diplomacy in the coming weeks, according to Reuters citing sources. It was also reported that a senior European diplomat said European leaders are nearing a decision on starting the snapback process against Iran, according to Axios’s Ravid.

RUSSIA-UKRAINE

• Ukrainian President Zelensky said Russians are currently sending negative signals regarding meetings and further developments.
• Russia's Kremlin said regarding possible security guarantees for Ukraine that there should be no Western troops in Ukraine, while it added that Russia is negative on European proposals and does not think a public discussion is helpful. Furthermore, the Kremlin said chiefs of negotiating groups are in contact.
• EU reportedly considers secondary sanctions to hit Russia's war effort, according to Bloomberg.
• US approved some diamond import transactions in Russia licenses, according to Bloomberg.

OTHER

• Chinese Foreign Ministry said it is neither reasonable nor realistic to ask China to join the US and Russia nuclear disarmament negotiations.
• Russian and Chinese submarines carried out their first joint patrol in the Asia-Pac region, according to Interfax.
• NATO Secretary General Rutte said Russia and China are preparing for confrontation with them and are expanding their defence industries.

ASIA-PAC

NOTABLE HEADLINES

• China seeks to triple output of AI chips as DeepSeek aims to match Western rivals in developing the most advanced AI, while one fab plant dedicated to producing Huawei's AI processors is set to begin production by year-end and with two more facilities set to launch next year.

EU/UK

NOTABLE HEADLINES

• UK's Ofgem raised the energy price cap by 2% for Oct-Dec (vs exp. 1% by forecaster Cornwall Insight).

DATA RECAP

• German GfK Consumer Sentiment (Sep) -23.6 vs. Exp. -22.0 (Prev. -21.5, Rev. -21.7)