By Mike Dolan
May 21 (Reuters) – What matters in U.S. and global markets today
By Mike Dolan, Editor-at-Large, Finance and Markets
Nvidia appeared to ring all the bells once again in its latest earnings release, but the reaction of its shares amounted to something of a shrug and a sign of how much is already in the price.
The world’s most valuable company showed almost a doubling of sales over the past year, modestly beat revenue forecasts for the coming quarter, lifted its dividend and plans an $80 billion stock buyback.
I’ll get into that and more below.
But first, check out my latest column on why borrowing costs could prove to be Trump’s biggest political headache.
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SHRUG FOR NVIDIA BUT IPOS EXCITE
Nvidia’s shares fell back about 1% out of hours, giving back what they’d gained during Wednesday’s trading session, ostensibly on questions around growing competition from other chipmakers.
But there was no real red flag on the mega AI boom, and chipmakers across the world rallied overnight, helped by Samsung’s 7% surge after it reached an 11th-hour deal to avert a workers’ strike.
The tech mood was further improved by reports that OpenAI would soon file for an IPO, news that sent SoftBank shares up almost 20% in Tokyo. And markets are braced for another trillion-dollar-plus mega-cap hitting Wall Street next month as SpaceX also filed for a long-awaited IPO on Wednesday.
But the broader market mood had been lifted by sliding oil prices amid reports of several supertankers transiting the Hormuz strait, combined with hopes that a deal to end the Iran war could be back on track. Brent crude settled at around $105 per barrel on Wednesday.
That saw the S&P 500 end 1% higher and Treasury yields beat a retreat, taking the wind out of the dollar’s sails in the process. Wall Street futures were up slightly before the open on Thursday, while Brent crude rose after Reuters reported that Iran’s Supreme Leader had said enriched uranium must stay in Iran.
Fed minutes released on Wednesday showed an increasingly hawkish central bank committee at its April meeting, wary of missing its inflation target for five years running.
Thursday will see retail giant Walmart top the earnings slate, while flash business surveys for May will stream in around the world. An early release indicated that economic activity in the euro zone fell at its sharpest rate since October 2023 in May.
Chart of the day
The scale of investment in the AI buildout is eye-popping – but the debt being raised to fund some of it is also rising sharply.
Today’s events to watch
• U.S. May flash PMIs (9:45 a.m. EDT), May Philadelphia Fed Business Index (8:30 a.m. EDT), weekly jobless claims (8:30 a.m. EDT), April housing starts (8:30 a.m. EDT)
• 10-year TIPS auction (1 p.m. EDT)
• U.S. corporate earnings: Walmart, Zoom
• Richmond Fed’s Tom Barkin speaks
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(By Mike Dolan)
