Chip stocks drag US futures; Stoxx 600 Gains: Markets Wrap Up

(Bloomberg) — The biggest U.S. chipmakers fell sharply in premarket trading on reports that Washington lawmakers are considering new restrictions on chip sales to China.

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Nvidia Corp. and Advanced Micro Devices Inc. It fell more than 3%, while Nasdaq 100 Index futures fell 0.5%. The Wall Street Journal reported late Tuesday that lawmakers were debating halting some sales of artificial intelligence chips to China, which could fuel further tensions between the two countries.

While Washington’s tough move could set back chipmakers such as Nvidia, it is unlikely to significantly dampen appetite for stocks that have surged on the back of AI frenzy, said Timothy Graf, head of EMEA macro strategy at State Street Bank. Trust Co.

“It’s a bit of a pullback in the 3-figure range of moves for some stocks,” he said.

Elsewhere, stocks rose broadly, capping yesterday’s tech-led rally in the US. Europe’s Stoxx 600 index rose 0.5% and Japan’s Nikkei 225 rose 2%.

Among individual companies, UPS Group AG advanced as the company prepares to cut more than half of Credit Suisse Group AG’s workforce. Goldman Sachs Group Inc. Embattled Swedish landlord SBB AB rose after analysts upgraded their recommendation on the stock.

Shares in Thames Water, Britain’s biggest water provider, fell, with a note falling 35 pence to the pound. It is in talks with authorities about contingency plans, including a temporary nationalisation, as concerns grow over a debt pile of more than £13 billion ($16.5 billion), people familiar with the matter said.

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Investors also await news from the central bank forum in Portugal, which includes the European Central Bank’s Christine Lagarde, the Federal Reserve’s Jerome Powell, the Bank of Japan’s Kazuo Ueda and the Bank of England’s Andrew Bailey.

Treasury yields were broadly lower, but resilient US economic data underscored the possibility of further monetary policy tightening by the central bank. Lagarde and many other policymakers have insisted that the ECB will continue to raise interest rates.

“Will they stop or not? When will we have a recession? All these kinds of questions on investors’ minds are causing a lot of volume in thin markets,” said Luke Hickmore, investment director at Abrdn.

The central bank is expected to release the results of its annual stress test of the banking sector today. After some meltdowns in the financial sector, analysts largely expect banks to pass, even as regulators explore more stringent requirements.

Highlights of this week:

• US Total Inventories, Commodity Trade Balance, Wednesday

• The Fed is due to release the results of its annual banking sector stress test on Wednesday

• The policy committee, which includes the ECB’s Christine Lagarde, Fed Chair Jerome Powell, the BOJ’s Kazuo Ueda and the BOE’s Andrew Bailey, on Wednesday.

• Eurozone Economic Confidence, Consumer Confidence, Thursday

• US GDP, Initial Jobless Claims, Thursday

• Atlanta Fed President Rafael Bostick speaks Thursday

• China Manufacturing PMI, Non-Manufacturing PMI, Balance of Payments, Friday

• US Personal Income and Spending, University of Michigan Consumer Sentiment, Friday

Some key movements in the markets:

Shares

• S&P 500 futures were down 0.2% at 5:12 a.m. New York time

• Nasdaq 100 futures fell 0.5%

• The future of the Dow Jones Industrial Average was little changed

• The Stoxx Europe 600 rose 0.5%

• The MSCI world index rose 0.2%

Coins

• The Bloomberg Dollar Spot Index rose 0.2%

• The euro was little changed at $1.0956

• The British pound fell 0.3% to $1.2710

• The Japanese yen was little changed at 144.01 per dollar

• The offshore yuan fell 0.4% to 7.2533 per dollar

Cryptocurrencies

• Bitcoin fell 1.3% to $30,251.99

• Ether fell 1.8% to $1,858.05

Bonds

• The yield on 10-year Treasuries fell two basis points to 3.74%.

• Germany’s 10-year yield fell two basis points to 2.33%.

• Britain’s 10-year yield fell three basis points to 4.34%.

materials

• West Texas Intermediate crude was down 0.5% at $67.39 a barrel.

• Gold futures fell 0.2% to $1,919 an ounce

This story was produced with the help of Bloomberg Automation.

–With assistance from Charlotte Yang, Ameya Garvey and Allegra Cadelli.

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