(Bloomberg) — Asian stocks rose along with US equity-index futures after Nvidia Corp.’s plan to resume sales of its H20 AI accelerator to China boosted optimism that trade tensions between the world’s two largest economies are waning.
The MSCI Asia Pacific Index erased earlier losses to gain 0.2% while contracts for the S&P 500 and the Nasdaq 100 edged up. A gauge of technology stocks rose as much as 2% in Hong Kong. Shares in mainland China fluctuated as the country’s second-quarter gross domestic product beat estimates. Bitcoin slipped below $120,000. Japan’s 10-year government bond yield climbed to its highest level since 2008 amid concerns about fiscal spending.
Nvidia plans to resume sales of its H20 artificial intelligence accelerator to China based on assurances from Washington that such shipments would be approved, a dramatic reversal from the earlier stance of President Donald Trump’s administration. US government officials have told Nvidia that they would green-light export licenses for the H20, the company said.
The news is “obviously positive, not just for the company, but also the AI semiconductor supply chain, as well as China tech platforms that are building AI capabilities,” said Vey-Sern Ling, managing director of Union Bancaire Privee. “This is also a good development for US-China relations.”
Stocks globally have rallied from their slump in April, when wide-ranging tariffs were announced, to record high levels as investors speculate the levies won’t significantly harm the US economy and company earnings, which kick off this week. That optimism faces a key test Tuesday as investors read the US inflation print, which will give investors clues on the impact from Trump’s tariffs and the direction for interest rates.
“Markets have been much more resilient than what we anticipated at the start of the year,” Vikas Pershad, Asian equities portfolio manager at M&G Investments, said in a Bloomberg TV interview. “We also are subject to this crisis fatigue that seems to have set in across market.”
Meanwhile, China’s economic growth exceeded expectations in the second quarter, but strong exports to markets outside the US masked deepening pressure caused by weak consumer demand at home.
The GDP print is coming out after data showed China ended the first half of the year with a record trade surplus of about $586 billion as exports to the US began to stabilize, with factories riding out the tariff rollercoaster that upended global commerce.
June home prices data bolstered the case for the government to take more measures to revive the property market.
In the US, traders are gearing up for results from big banks and inflation data. While corporate America is bracing for its weakest earnings season since mid-2023, lower estimates could be easier for companies to beat. As US financial giants kick off earnings season Tuesday, strategists say subdued profit expectations are setting the stage for their sizzling run to continue.
After months of seeing little inflation, the CPI probably experienced slightly faster growth in June as companies started to pass along higher costs of imported merchandise associated with tariffs.
The options market is betting the S&P 500 will swing 0.6% in either direction after Tuesday’s CPI, based on the cost of at-the-money puts and calls, according to Citigroup Inc. That would be in-line with implied moves the past two months, though below an average realized swing of 0.9% over the last year.
“Earnings growth is slowing, tariffs are starting to bite, and geopolitical risk remains elevated. Yet, stock valuations reflect a lot of optimism,” said Jeff Buchbinder and Adam Turnquist, strategists at LPL Financial, in a note Monday. “While trade uncertainty should start to dissipate in the second half, the path to clarity may be bumpy.”
Some of the main moves in markets:
Stocks
- S&P 500 futures were little changed as of 11:35 a.m. Tokyo time
- Japan’s Topix was little changed
- Australia’s S&P/ASX 200 rose 0.4%
- Hong Kong’s Hang Seng rose 0.8%
- The Shanghai Composite fell 0.4%
- Euro Stoxx 50 futures rose 0.2%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $1.1674
- The Japanese yen was little changed at 147.67 per dollar
- The offshore yuan was little changed at 7.1719 per dollar
Cryptocurrencies
- Bitcoin fell 1.8% to $118,007.22
- Ether fell 1.2% to $2,969.03
Bonds
- The yield on 10-year Treasuries was little changed at 4.44%
- Japan’s 10-year yield advanced two basis points to 1.595%
- Australia’s 10-year yield advanced two basis points to 4.39%
Commodities
- West Texas Intermediate crude fell 0.4% to $66.73 a barrel
- Spot gold rose 0.2% to $3,349.13 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Abhishek Vishnoi and Winnie Hsu.
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