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HomeUncategorizedMarket Watch: Nvidia's AI Chip Launch Boosts Market Sentiment, Futures Higher.

Market Watch: Nvidia’s AI Chip Launch Boosts Market Sentiment, Futures Higher.

Market Watch: Dow futures contract increased by 0.1%, S&P 500 futures by 0.1%, and Nasdaq 100 futures by 0.2%.

US stock futures rise amid employment report and Nvidia unveiling AI chip, influencing Federal Reserve interest rate cuts and addressing competition.

U.S. jobs report

The US labor market remained resilient despite elevated interest rates in May, with 185,000 jobs added. Markets were concerned that a strong economy might prevent the Fed from lowering rates or increase borrowing costs. However, data showed slowing inflation and cooling job demand. Policymakers call for patience on rate cuts, but a soft employment report could indicate an easing in the broader economy.

 Nvidia unveils latest chip model

Nvidia has unveiled its latest AI-optimized chip, “Rubin,” set to ship in 2026. The announcement comes before the company’s next generation of data center processors, “Blackwell,” is being rolled out. Nvidia, which has added $350 billion in market value, is competing with rivals Advanced Micro Devices and Intel, as well as in-house chips from tech giants like Alphabet and Microsoft. AMD also unveiled an update for its MI325X accelerator and an upcoming MI350 processor series.

Chinese manufacturing activity

China’s manufacturing sector grew more than expected in May, according to private purchasing managers’ index data. The Caixin manufacturing PMI read 51.7, higher than expectations and 51.4 in the previous month. This contrasts with an official PMI reading, which showed unexpected manufacturing shrinkage. The Caixin survey covers smaller private businesses in southern China.

Economic Calendar

  • 9:45 PMI Manufacturing Index
  • 10:00 ISM Manufacturing Index
  • 10:00 Construction Spending

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Recent data indicating a possible cooling in the U.S. economy have alleviated some persistent inflation concerns, fueling hopes that the Federal Reserve will start to bring interest rates down from more than two-decade highs as soon as September. Along with the Dow, the benchmark  and tech-heavytouched record marks last week.

The durability of the strength on Wall Street will likely be tested by a fresh batch of corporate results this week, including quarterly returns from artificial intelligence darling Nvidia (see below). Durable goods and consumer sentiment data will also be in focus as markets hunt for more evidence that growth is moderating enough to give the Fed justification for rolling out rate cuts this year.

Recent data indicating a possible cooling in the U.S. economy have alleviated some persistent inflation concerns, fueling hopes that the Federal Reserve will start to bring interest rates down from more than two-decade highs as soon as September. Along with the Dow,

The durability of the strength on Wall Street will likely be tested by a fresh batch of corporate results this week, including quarterly returns from artificial intelligence darling Nvidia (see below). Durable goods and consumer sentiment data will also be in focus as markets hunt for more evidence that growth is moderating enough to give the Fed justification for rolling out rate cuts this year.

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MFitch Ratings has downgraded China’s credit rating outlook to “Negative” from “Stable” due to concerns over growing public debt and slowing growth in the world’s second-largest economy. The agency affirmed China’s rating at A+, citing increasing risks to China’s public finance outlook. Concerns over slowing economic growth have grown in recent months, with Fitch expecting gross domestic product growth to fall to 4.5% in 2024.

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U.S. inflation data for February is expected to provide insights into the future direction of Federal Reserve monetary policy. The overall consumer price index (CPI) is expected to match the previous month’s pace of 3.1% annually, with the core CPI expected to slow to 3.7% from 3.9% in January. However, the month-on-month gauge is expected to shed light on price gains momentum.

Fed officials have made cooling inflation the main objective of interest rate hikes, which have brought borrowing costs to over two-decade highs. They suggest cuts may be coming later this year, but need more evidence that price growth is sustainablely easing back down to their 2% annualized target. Analysts at ING believe inflation is likely too hot for comfort.

U.S. inflation data for February is expected to provide insights into the future direction of Federal Reserve monetary policy. The overall consumer price index (CPI) is expected to match the previous month’s pace of 3.1% annually, with the core CPI expected to slow to 3.7% from 3.9% in January. However, the month-on-month gauge is expected to shed light on price gains momentum.

Fed officials have made cooling inflation the main objective of interest rate hikes, which have brought borrowing costs to over two-decade highs. They suggest cuts may be coming later this year, but need more evidence that price growth is sustainablely easing back down to their 2% annualized target. Analysts at ING believe inflation is likely too hot for comfort.

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