Nvidia slides 5.5% as hot inflation report and FBI probe rattle Wall Street
Wall Street closed lower on Tuesday after a hotter-than-expected US inflation report hardened expectations of Federal Reserve interest rate hikes, and Nvidia shares fell another 5.5 per cent as an FBI investigation into its chief executive weighed on the chipmaker.
The tech-focused Nasdaq lost 0.7 per cent, leading the three major indices down, while the Dow slipped 0.3 per cent and the S&P 500 fell 0.4 per cent. The dollar gained against the euro, the pound and the yen. The inflation data showed consumer prices slowed less than expected in October, hours after Fed Governor Christopher Waller called for a swift response and suggested he could support a 50-basis-point hike in December. Dallas Fed President Lorie Logan also signalled strong support for swift action.
"This is a recognition that inflationary pressures continue to accelerate and the Fed is going to have to be aggressive," said Joe Zidle, chief market strategist at Cresset Capital Management. Nvidia's decline followed a 4.3 per cent drop on Monday, after the company disclosed an affair between CEO Jensen Huang and a woman reportedly suspected of being a Chinese spy. The AI chipmaker briefly slid below Microsoft in market valuation during the session but ended as the world's second most valuable publicly traded company after Apple.
Anthropic disclosed plans to raise up to $64 billion in its upcoming initial public offering later this month, seeking less than the estimated $100 billion floated weeks earlier, according to a securities filing that showed third-quarter revenue of $17 billion, up from $1.4 billion a year earlier. "The path is not clear for the AI trade, and it may continue to struggle" even if the Anthropic IPO succeeds next week, said Kathleen Brooks, research director at trading platform XTB.
Brent crude fell below $90 a barrel for the first time since August before closing at $91.49, down 1.2 per cent, as hopes of a US-Iran agreement eased supply concerns. Axel Rudolph, chief technical analyst at IG, cited President Trump signalling that further strikes on Iran may not be necessary as oil flows through the Strait of Hormuz increase. European and Asian markets mostly rose, with Tokyo's Nikkei up 2.9 per cent and Seoul's Kospi up 4.4 per cent.
What it means for Pakistan: Pakistani investors with exposure to US technology stocks or global funds tracking the Nasdaq face sharper swings as rate-hike expectations and the Nvidia investigation weigh on the sector. Any sustained rise in US rates can also tighten global financial conditions, feeding through to dollar funding costs and remittance-linked household budgets in Pakistan.
