Asian Stocks Stumble Amid Rising US Dollar, NVIDIA Tops Tech Giants

Asia shares struggle, dollar surges on reduced US Federal Reserve rate cut bets. NVIDIA Corporation reported Q4 revenue of $1.78bn, beating estimates, driven by strong gaming and data centre sales. The company's shares rose 5.3% in extended trading.

Asia shares experienced a decline on Wednesday as traders reduced bets on a Federal Reserve interest rate cut following mixed US inflation data. The MSCI regional gauge dropped 0.4%, with losses in Australia, Japan, and South Korea. The yen also pulled back slightly after falling to its lowest level since April. Federal Reserve Bank of Dallas President Lorie Logan's comments reinforced concerns about persistent inflation, suggesting a cautious approach to monetary policy [1].

The consumer price index (CPI), excluding food and energy, increased by 0.2% in June. While a decline in car prices helped keep inflation in check, goods categories exposed to Trump's levies, such as toys and appliances, rose at the fastest paces in years. This mixed data led traders to trim their bets on a Fed rate cut, with the probability of a September move now seen as only slightly higher than 50% [1].

NVIDIA Corporation reported Q4 revenue of $1.78 billion, beating estimates and driven by strong gaming and data centre sales. The company's shares rose 5.3% in extended trading. The news boosted other chipmakers, with Advanced Micro Devices and Super Micro Computer both gaining more than 6.4%. The Nasdaq Composite finished at a record high of 20,677.80, supported by NVIDIA's surge [3].

The dollar surged against the euro and yen, reflecting reduced expectations of US monetary easing. The euro fell to its lowest level since 2002, while the yen pulled back after reaching its lowest level since April. The US dollar index (DXY) rose to its highest level since 2002, indicating increased investor confidence in the US economy [1].

The second-quarter earnings season began with mixed results. JPMorgan Chase raised its 2025 net interest income outlook but slipped 0.7% in trading. Wells Fargo's profit rose despite a 5.5% drop in shares due to reduced loan-loss reserves. BlackRock reached a new milestone for assets under management but saw its shares slide 5.9%. Citigroup's traders boosted profit, with shares climbing 3.7% to their highest finish since the global financial crisis [3].

Investors are now closely watching the Federal Reserve's next meeting on July 30 to gauge the central bank's stance on interest rates. The mixed inflation data and NVIDIA's strong earnings report have provided a mixed signal, with some investors rotating back into technology stocks and others remaining cautious about the economic outlook [3].

References:
[1] https://m.economictimes.com/markets/stocks/news/asian-stocks-decline-as-fed-rate-cut-bets-wane/articleshow/122544055.cms
[2] https://www.moomoo.com/news/post/95437169/record-tr4cking-news-will-the-june-cpi-make-or-break-the-summer-rally
[3] https://m.economictimes.com/markets/stocks/news/nasdaq-ends-at-another-record-high-on-nvidias-china-chip-cheer/articleshow/122546186.cms