The inevitable levelling off of Nvidia's explosive growth is already underway, but the chip designer also faces investor worries about AI overspend and questions about how much U.S. chip curbs on China will cost the company going forward.
Nvidia's stock price - which is basically unchanged in 2025 to date - climbed anew on Tuesday along with the broad market rally. That was helped by reports that the company will launch a new chipset for China at significantly lower prices than the currently restricted H20 model.
Meanwhile, the overall market mood improved considerably, with the S&P 500 jumping 2% on relief over temporarily defused U.S.-European trade tensions, a retreat in long-term government debt yields, and positive U.S. consumer confidence readings for May.
However, there were mixed takes on the May household survey, capital goods orders data for last month was soft, and edginess in long bond markets is already coming back.
So the main driver of the rally was likely the U.S.-EU trade news after President Donald Trump backed down from Friday's 50% tariff threat against the European Union, delaying its implementation until July 9.
EU officials have asked leading European companies and CEOs for details of their U.S. investment plans, according to two sources familiar with the matter, as Brussels prepares to advance trade talks with Washington.
Tensions on long-dated government debt resurfaced today, meantime, with another tepid sale of Japan's ultra long bonds, reinforcing speculation that Tokyo may be forced to trim sales of debt of such long maturities as fiscal worries grow.
The Ministry of Finance sold about 500 billion yen ($3.46 billion) of 40-year bonds with a bid-to-cover ratio of 2.21, the lowest since a sale in July last year and well below the historical average of 3.
That saw 30-year JGB borrowing rates jump back about 5 basis points from Tuesday close, drawing long-dated yields higher around the world. The yen strengthened slightly on the day.
With its own home-grown fiscal concerns, the U.S. saw 30-year yields also back up about 5 bps to just under 5%. Some $70 billion of 5-year Treasury notes come under the hammer later.
Meanwhile, investor attention has also turned to a Financial Times report that European Central Bank President Christine Lagarde considered stepping down before her term ends in 2027.
The ECB responded by saying Lagarde was determined to complete her eight-year term.
Elsewhere, the New Zealand dollar held firm even after the country's central bank cut its benchmark rate by 25 bps to 3.25% and flagged a slightly deeper easing cycle than it forecast three months ago.
And Shein is working towards a listing in Hong Kong after the online fast-fashion retailer's proposed initial public offering in London failed to secure the green light from Chinese regulators.
Now to today's column, where I look into this week's combative speech from ECB boss Lagarde on the status of the euro.
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