Global Markets Rally on Tech Gains Despite Nvidia Slump and CEO Scrutiny
Market Overview and Key Developments
Nov 9 - Wall Street stocks followed their European counterparts higher on Monday, in a robust tech-driven rebound dominated by chips. Easing crude prices soothed inflation fears and boosted risk appetite.
Nvidia tanked on scrutiny over its CEO's affair with an alleged spy, sending its rivals' shares spiking.
I will go into more detail on today's market moves below. If you have more time to read, here are a few articles I recommend to help you make sense of what happened in markets today.
Top Financial News Highlights
1. Shares of AI chip giant Nvidia tumbled amid an internal investigation into whether CEO Jensen Huang had been targeted by a foreign intelligence effort
2. A sweeping bipartisan energy bill has emerged as the US Congress' first attempt to address public anger over data centers and rising energy costs, an anger which helped propel Democrats to their landslide midterm victory
3. G7 allies gathered in Paris are set to weigh the effects on US policies on Ukraine, the Middle East and ties with its allies following Trump's midterm rout
4. Crude prices tumbled after US President Trump downplayed the likelihood of new attacks on Iran, although attacks on ships near the Strait of Hormuz kept supply worries alive
5. France's economy is expected to expand "moderately" in the fourth quarter, avoiding recession, according to the Bank of France
6. China's October PPI accelerated in October at its fastest pace in nearly 4-1/2 years
Today's Key Market Moves
Stocks and Sectors
• STOCKS: Wall Street surged in broad rally, led by chips bounce; Europe's STOXX gained 1.3% with boosts from banks and defense stocks
• SECTORS/SHARES: Small-caps, semiconductors, airlines, industrials and consumer discretionary were among the best performing sectors
Currency, Bonds, and Commodities
• FX: The dollar weakened against the euro and the yen as Iran talks bolstered risk appetite
• BONDS: US Treasury yields were mixed as safe haven demand eased and markets priced in an increased likelihood of a December rate hike from the Federal Reserve
• COMMODITIES/METALS: Crude prices settled lower after Trump downplayed possibility of further Iran strikes; gold climbed on easing inflation fears
Today's Talking Points
Regulatory and Political Developments
Perpetual Futures and Market Risks
* Trump administration's embrace of "perp" futures raises concerns among Wall Street stalwarts
The Trump administration's effort to bring offshore perpetual futures to the US is raising alarms among executives and exchanges and other prominent market participants, who worry the products pose serious new risks to the multitrillion-dollar derivatives market.
Perpetual futures, or "perps," trade around the clock, do not expire and are usually leveraged, sometimes by as much as 50 times.
The Reuters interviews with executives at exchanges, trading firms, asset managers and market-structure providers revealed broader concerns that improperly regulated perps and 24-hour trading could disrupt market structure and erode risk-management safeguards bolstered after the 2007-09 financial crisis.
Congressional Probes and Oversight
* US Democrats have signaled probes into Musk, Miller
Tech megabillionaire Elon Musk and President Donald Trump's newly appointed White House chief of staff, Stephen Miller, and some large companies will likely be targets of congressional probes when Democrats take control of Congress in January, senior lawmakers said on Sunday.
In television appearances, US Representative Robert Garcia of California and US Senator Elizabeth Warren of Massachusetts, set to lead the House Oversight and Senate Banking committees, vowed aggressive oversight after their party's sweeping midterm election victory.
Additionally, Democratic House leader Hakeem Jeffries has indicated that Democrats would back an impeachment of Defense Secretary Pete Hegseth.
Senate Banking Committee Leadership
* Progressive Democrat Elizabeth Warren, Wall Street critic, likely to control Senate Banking agenda
Next year, Massachusetts Senator Elizabeth Warren is poised to become the chair of the Senate Banking Committee when Democrats take control of Congress in January, gaining the power to issue subpoenas, demand testimony and advance legislation.
That probably means intensified scrutiny for big banks, lenders, private equity firms and crypto companies.
Warren will also likely launch investigations into the Trump administration's mass firings of financial agency workers and its attempts to shut down the Consumer Financial Protection Bureau, an agency she helped create.
What Could Move Markets Tomorrow?
• Developments in the Middle East
• Energy market moves
• Social media posts from Trump
• Ongoing US midterm election fallout
• US Federal Reserve members due to speak: Board Governor Christopher Waller, Dallas Fed President Lorie Logan, Kansas City Fed President Jeffrey Schmid, Vice Chair Michelle Bowman, Philadelphia Fed President Anna Paulson
• US CPI (October)
• US Small Business Optimism (October)
• Netherlands, Norway, Denmark, Hungary CPI (October)
• South Korea unemployment (October)
Additional Information
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Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
