Stocks, Dollar Hesitant As Traders Eye US Rate Outlook, Nvidia

Stock markets were mixed from Asia to the United States on Monday as cautious traders reassessed the outlook for interest rates ahead of Donald Trump's return to the White House, with policies that could reignite inflation after months of cooling prices

London, (UrduPoint / Pakistan Point News - 18th Nov, 2024) Stock markets were mixed from Asia to the United States on Monday as cautious traders reassessed the outlook for interest rates ahead of Donald Trump's return to the White House, with policies that could reignite inflation after months of cooling prices.

Focus also turned to chip behemoth Nvidia ahead of its quarterly earnings on Wednesday, which could indicate prospects for the entire tech sector.

Global equity markets have cooled since Trump's US election win this month, while investors waiting in particular for his coming pick for Treasury secretary.

All three main indices on Wall Street ended deep in the red on Friday, with the Nasdaq down more than two percent, after Federal Reserve boss Jerome Powell signalled a slower pace of interest rate cuts.

"There is concern that a reckless spending policy could fuel inflation again, forcing the Fed to raise interest rates again at some point," said Konstantin Oldenburger, an analyst at CMC Markets.

European markets tracked those losses Monday and US stocks opened mixed before recovering some ground, with few investors willing to take new positions ahead of Nvidia's results.

"The generative AI chip giant... has the potential to influence markets substantially" given its outsize weight in all US indices, said David Morrison, senior analyst at Trade Nation.

He added that data showing US inflation is proving sticky even before any potential uplift to prices if Trump follows through on tariff threats and other policies once he re-enters the White House in January.

The Fed's next policy decision in December will be closely followed for an idea about officials' plans.

Expectations that a second Trump administration will impose painful fresh tariffs on Chinese goods have added to the unease and ramped up fears of another trade war between the economic powerhouses.

"It is likely that if Trump does proceed with tariffs on Chinese goods, they will respond aggressively," said Kathleen Brooks, research director at traders XTB.

In Europe, the vice president of the European Central Bank said Monday that Trump's spending plans risked inflating the US government's budgetary deficit and spreading worries on markets.

"Trade tensions could rise further," with resulting risks for economic activity, Luis de Guindos noted.

Investor focus this week will be on also the release of purchasing managers' index data for signals about the health of business activity in the eurozone, Britain and the United States.

Friday's PMI data "may capture some of the initial sentiment impact from around the world regarding Trump's victory," said Jim Reid, economist at Deutsche Bank.

"Europe will be especially interesting on this front as the continent awaits their trade fate," he added.

In Asia on Monday, Tokyo and Shanghai stock markets closed lower while Hong Kong rose, helped by hopes of more Chinese stimulus after a recent raft of measures.

Bitcoin sat at around $90,000, having hit another record high of $93,462 last week on hopes Trump will push for more deregulation of the crypto market.

Crude oil prices jumped after production stopped at a key Norwegian field in the North Sea, Sverdrup, due to an electrical supply disruption.

- Key figures around 1650 GMT -

New York - Dow: UP 0.1 percent at 43,501.07

New York - S&P 500: UP 0.6 percent at 5,907.77

New York - Nasdaq: UP 1.0 percent at 18,863.89

London - FTSE 100: UP 0.6 percent at 8,109.32 (close)

Paris - CAC 40: UP 0.1 percent at 7,278.23 (close)

Frankfurt - DAX: DOWN 0.1 percent at 19,189.19 (close)

Tokyo - Nikkei 225: DOWN 1.1 percent at 38,220.85 (close)

Hong Kong - Hang Seng Index: UP 0.8 percent at 19,576.61 (close)

Shanghai - Composite: DOWN 0.2 percent at 3,323.85 (close)

Euro/dollar: UP at $1.0574 from $1.0536 on Friday

Pound/dollar: UP at $1.2649 from $1.2611

Dollar/yen: UP at 155.04 yen from 154.32 yen

Euro/pound: UP at 83.59 pence from 83.52 pence

Brent North Sea Crude: UP 2.9 percent at $73.09 per barrel

West Texas Intermediate: UP 3.0 percent at $68.92 per barrel

dan-ajb/js/

Nvidia

Deutsche Bank

S&P Global Ratings