US stocks edged higher amid tech strength and a slew of data despite NVIDIA declining post-earnings - Newsquawk Asia-Pac Market Open

• US stocks edged higher in which the S&P 500 extended on record highs and the Nasdaq outperformed with tech, energy and communication services leading the gains following NVIDIA's Q2 report, despite the Co.'s shares declining due to investors feeling underwhelmed by the data centre revenue figure, EBIT and revenue guidance. Nonetheless, semiconductors took the overall report as a positive and CEO Huang confirmed reports that they're having talks with the White House on Blackwell chip sales to China, but noted it "will take a while". Furthermore, there was a slew of data releases in which GDP growth for Q2 was revised higher, as was GDP sales, while Core PCE Prices was slightly cooler than expected and jobless claims fell more than anticipated.
• USD was pressured amid a softer yield environment and despite the latest round of US data which showcased an upward revision to US GDP (Q2) growth, 3.3% (exp. 3.1%, prev. 3.0%), and GDP Sales, 6.8% (prev. 6.3%), although Core PCE Prices were revised down, while jobless claims fell. Nonetheless, there wasn't much of a move in the dollar following the data, perhaps amid tentativeness ahead of Fed Governor Cook's hearing and the monthly PCE data on Friday.
• Looking ahead, highlights include South Korean Industrial Production & Retail Sales, Japanese Unemployment Rate, Industrial Production, Retail Sales & Tokyo CPI, Australian Private Sector Credit, Supply from Australia.

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LOOKING AHEAD

• Highlights include South Korean Industrial Production & Retail Sales, Japanese Unemployment Rate, Industrial Production, Retail Sales & Tokyo CPI, Australian Private Sector Credit, Supply from Australia.
• Click for the Newsquawk Week Ahead.

US TRADE

• US stocks edged higher in which the S&P 500 extended on record highs and the Nasdaq outperformed with tech, energy and communication services leading the gains following NVIDIA's Q2 report, despite the Co.'s shares declining due to investors feeling underwhelmed by the data centre rev figure, EBIT and revenue guidance. Nonetheless, semiconductors took the overall report as a positive and CEO Huang confirmed reports that they're having talks with the White House on Blackwell chip sales to China, but noted it "will take a while". Furthermore, there was a slew of data releases in which GDP growth for Q2 was revised higher, as was GDP sales, while Core PCE Prices was slightly cooler than expected and jobless claims fell more than anticipated.
• SPX +0.32% at 6,502, NDX +0.58% at 23,703, DJI +0.16% at 45,637, RUT +0.19% at 2,378.
• Click here for a detailed summary.

TARIFFS/TRADE

• USTR extended certain exclusions from China section 301 tariffs through November 29th, according to a statement.
• Chinese Commerce Ministry confirmed trade negotiator Li Chenggang will travel to Washington for meetings with US officials. It was separately reported that China’s Commerce Ministry is to extend anti-dumping duties on US, EU, South Korea, Japan and Thailand Phenol for five years.
• EU proposes tariff reductions to implement the EU-US deal, in which the proposals are the first steps to ensure tariff relief by the US for the vital EU automotive sector, starting retroactively from August 1st. First act concerns a proposal to eliminate tariffs on US industrial goods and provide preferential market access for a range of US seafood and non-sensitive agricultural goods, while second one proposes to prolong the tariff-free treatment of lobster, including processed lobster.
• Mexico’s Economy Minister Ebrard said Mexico is not pursuing a free trade agreement with Brazil.

NOTABLE HEADLINES

• Fed's Cook (voter) asked US judges to issue a temporary order declaring US President Trump's effort unlawful and bar the Fed from taking steps to oust her.
• Fed's Cook’s lawyers suggested that an unintentional “clerical error” may have been behind the mortgage dispute over which President Trump wants her fired. It was separately reported that the judge in Fed's Cook lawsuit set the hearing for this Friday at 10:00EDT/15:00BST.
• White House said Fed's Cook was credibly accused of lying and President Trump exercised his lawful authority. White House later commented that President Trump will be continuing the fight with Fed Governor Cook.
• US Treasury Secretary Bessent said capital markets are roaring back and companies are taking calculated risks, spending, and pursuing deals in this economy.
• White House said the details of the Intel (INTC) deal are still being ironed out.

DATA RECAP

• US GDP 2nd Estimate (Q2) 3.3% vs. Exp. 3.1% (Prev. 3.0%)
• US Core PCE Prices Prelim (Q2) 2.5% vs. Exp. 2.6% (Prev. 2.5%)
• US Pending Sales Change MM (Jul) -0.4% vs. Exp. -0.1% (Prev. -0.8%)
• US KC Fed Composite Index (Aug) 1.0 (Prev. 1.0)
• US Initial Jobless Claims w/e 229.0k vs. Exp. 230.0k (Prev. 235.0k, Rev. 234k)
• US Continued Jobless Claims w/e 1.954M vs. Exp. 1.97M (Prev. 1.972M, Rev. 1.961M)

FX

• USD was broadly sold amid a softer yield environment and despite the latest round of US data which showcased an upward revision to US GDP (Q2) growth, 3.3% (exp. 3.1%, prev. 3.0%), and GDP Sales, 6.8% (prev. 6.3%), although Core PCE Prices were revised down, while jobless claims fell. Nonetheless, there wasn't much of a move in the dollar following the data, perhaps amid tentativeness ahead of Fed Governor Cook's hearing and the monthly PCE data on Friday.
• EUR benefitted from the dollar weakness and approached just shy of 1.1700 before paring some of the gains, while EU confidence surveys were softer-than-expected and ECB Minutes stated it was argued that soft data suggested a more benign situation than at the time of the June meeting.
• GBP eked marginal gains with price action in GBP/USD choppy around the 1.3500 level amid quiet catalysts for the UK, although there were reports that UK PM Starmer is planning a cabinet shake-up and is expected to appoint a new economic advisor ahead of the Autumn Budget.
• JPY strengthened with USD/JPY retreating to sub-147.00 territory amid narowwing US-Japan yield differentials.

FIXED INCOME

• T-notes settled higher with the curve bull flattening ahead of PCE data.

COMMODITIES

• Oil prices edged higher alongside a softer dollar and Russia-Ukraine geopolitics.
• Russia's offline primary oil refining capacity reached a record monthly high of 6.4mln tons in August which is up 65% from the prior estimate, while Ukrainian drone attacks disrupted approximately 17% of capacity, equating to roughly 1.2mln bpd and actual fuel production is expected to decline by around 5% vs July.
• Russia's Ust-Luga port to operate at half capacity in September (350k bpd) due to pipeline damage from Ukrainian drone strikes, according to Reuters citing sources.

GEOPOLITICAL

MIDDLE EAST

• Israeli sources noted that Israel’s navy and air force participated in an attack on Houthi positions.
• France, UK and Germany triggered the process to reimpose UN sanctions on Iran, while the three are to make use of the next 30 days to try and resolve issues with Iran, according to Reuters citing a letter.
• US Secretary of State Rubio said Washington welcomes the initiation of sanctions snapback against Iran in an official statement, and the US remains open for direct engagement with Iran.
• Senior Iranian official said the move by E3 countries to trigger the snapback mechanism is "illegal and regrettable", while the official added it is an action against diplomacy and not a chance for it. The official said Iran used all of its capacities to dissuade the E3 from taking this step, although diplomacy with the E3 will continue and Tehran will decide on Iran's reciprocal measures. Furthermore, it was noted that some options are under consideration, such as reducing cooperation with the IAEA within the framework of the safeguards agreement or even withdrawing from the NPT, while Iran will not concede under pressure.
• Russia and China finalised a draft UN Security Council Resolution to extend Iran's nuclear deal for six months, while the text urges all parties to the Iran nuclear deal to immediately resume negotiations, according to Reuters citing diplomats.
  - Deputy Russian UN Envoy said E3 move on Iran at UN has no legal bearing and does not think the Security Council should act on the E3 move, while Russia and China have not yet requested a UN Security Council vote on their draft resolution.

RUSSIA-UKRAINE

• German Chancellor Merz said there will be no meeting between Russian President Putin and Ukrainian President Zelensky.
• European Commission President von der Leyen said she spoke with US and Ukrainian Presidents following the "massive strike on Kyiv which also hit our EU offices", while she stated Russian President Putin must come to the negotiating table.
• White House said US President Trump was not happy about the overnight strikes in Ukraine and will be making an additional statement on Russia and Ukraine.
• US envoy on Ukraine Kellogg warned that Russian strikes threaten peace efforts led by US President Trump.
• Russian drones were reportedly flying over US weapons routes in Germany, according to officials cited by NYT. However, Russia's Kremlin later said the report that Russia is flying surveillance drones over US weapons routes in Germany is fake news.
• Russia's Kremlin said Russia is continuing to strike Ukraine military and military related targets, when asked if the big Russian overnight strikes on Ukraine contradicts Moscow's desire to make progress in peace talks, while it added that Russia is still interested in negotiations, but noted in order to achieve its aims through politics and diplomacy, Ukraine is also continuing its own strikes against Russian infrastructure, including civilian infrastructure.

OTHER

• US Secretary of Defence Hegseth said the US Army is to establish the Joint Interagency Task Force to secure skies and will counter "hostile drones".

ASIA-PAC

NOTABLE HEADLINES

• China's Market Regulator held a meeting on preventing irrational competition and will guide firms to compete on quality and value.
• NVIDIA (NVDA) CEO said they are starting to have conversations with the Trump admin regarding Blackwell chips to China, according to a Fox Business interview.
• Japan's MOF sounds out dealers regarding reducing super-long JGBs, according to Nikkei.

EU/UK

NOTABLE HEADLINES

• UK PM Starmer plans a cabinet shake-up and is expected to appoint a new economic advisor ahead of the Autumn Budget, according to FT.
• French Finance Minister Lombard said the public deficit will be on target in 2025, while the 2026 budget is almost ready and the text that gets voted will be the "fruit of compromise". Lombard added that the budget they are preparing does not have a surtax on big companies.
• ECB's Rehn said EZ growth is more resilient than expected and inflation is slowing to below the 2% target, while he considers a rapid and significant weakening of USD dominance as unlikely.
• ECB Minutes stated it was argued that soft data suggested a more benign situation than at the time of the June meeting, and the environment remained exceptionally uncertain, especially because of trade disputes and geopolitical developments. Furthermore, it was stated that interest rates were already significantly supportive of loan demand and past rate cuts had yet to have their full impact, with some transmission remaining in the pipeline.

DATA RECAP

• EU Economic Sentiment (Aug) 95.2 vs. Exp. 96.0 (Prev. 95.8, Rev. 95.7)
• EU Industrial Sentiment (Aug) -10.3 vs. Exp. -10.0 (Prev. -10.4, Rev. -10.5)
• EU Services Sentiment (Aug) 3.6 vs. Exp. 3.9 (Prev. 4.1)
• EU Business Climate (Aug) -0.72 (Prev. -0.72, Rev. -0.71)
• EU Selling Price Expectations (Aug) 6.7 (Prev. 9.2, Rev. 8.9)
• EU Consumer Inflation Expectations (Aug) 25.9 (Prev. 25.1)