Asian Stocks Fall as Investors Await Nvidia Earnings Amid Geopolitical Tensions – Analysis & Breakdown
By Ankur Banerjee
SINGAPORE (Multibagger) - In the world of finance, Asian stocks fell on Tuesday as investors pondered looming U.S. interest rate cuts and awaited earnings from AI darling Nvidia (NASDAQ:), while rising tensions in the Middle East and supply concerns checked risk sentiment and lifted oil prices.
Gold prices were just shy of a record peak, while the dollar firmed and the yen hovered near its highest in three weeks as investors sought safety amid geopolitical risks, with Israel and Lebanon's Hezbollah exchanging fire on Sunday.
Investors are on edge ahead of Nvidia's earnings report on Wednesday, where anything short of a stellar forecast from the AI chipmaker could jolt investor confidence in the AI-fueled rally.
MSCI's broadest index of Asia-Pacific shares outside Japan was 0.36% lower on Tuesday, inching away from the one-month high it touched in the previous session.
China's blue stock index CSI300 fell 0.28% while Hong Kong's was 1% lower in early trading, dragged by lackluster earnings from Temu-parent PDD Holdings due to lower consumer spending.
Also weighing on sentiment was the move by Canada, following the lead of the United States and European Union, to impose a 100% tariff on imports of Chinese electric vehicles and a 25% tariff on imported steel and aluminum from China.
POWELL PIVOT
In an eagerly awaited speech, Federal Reserve Chair Jerome Powell on Friday endorsed an imminent start to interest rate cuts, putting the focus on the Fed's September meeting.
Investor focus will be on the U.S. personal consumption expenditure price index - Fed's preferred gauge of inflation - due to be released on Friday and then the August payrolls report next week.
Markets are fully priced for a 25-basis-point cut from the Fed next month, with 100 bps of easing anticipated in the next three meetings of the year.
The yen was a shade lower at 144.67 per dollar, giving up some of its safe haven gains from the previous session which saw it rise to a three-week high of 143.45 per dollar.
The dollar index, which measures the U.S. currency against six rivals, was last at 100.84, close to a 13-month low of 100.53 it touched in the previous session.
Oil prices took a breather in early trading on Tuesday after rising 3% in the previous session due to supply concerns in the wake of escalating tensions in the Middle East and production cuts in Libya.
Gold prices eased to $2,511 per ounce on Tuesday just shy of the record high of $2,531.60 reached on Aug. 20.
Overall, the current financial market trends indicate caution among investors due to geopolitical tensions, interest rate cuts, and upcoming earnings reports. The focus is on NVIDIA's performance and the Federal Reserve's potential rate cuts. This could impact stock markets, oil prices, and currency exchange rates. It is essential for investors to stay informed and make informed decisions to navigate through these uncertain times.