Global shares mixed ahead of speech by Federal Reserve chair
Global shares were trading mixed Friday, as investors digested a blowout profit report from Nvidia and mixed reports on the United States economy.
France's CAC 40 rose 0.6% in early trading to 7,256.90. Germany's DAX added 0.4% to 15,682.35. Britain's FTSE 100 gained 0.4% to 7,365.44. U.S. shares were set to drift higher with Dow future up 0.2% at 34,220.00. S&P 500 futures were up 0.1% at 4,391.50.
But in Asia, benchmarks sank, while oil prices rose.
Japan's benchmark Nikkei 225 dropped 2.1% to finish at 31,624.28. Australia's S&P/ASX 200 dipped 0.9% to 7,115.20. South Korea's Kospi lost 0.7% to 2,519.14. Hong Kong's Hang Seng slipped 1.4% to 17,956.38, while the Shanghai Composite shed 0.6% to 3,064.07.
Japanese inflation eased to 2.9% in August from the previous year, largely because of lower energy prices, according to government data. The consumer price index, excluding fresh food prices, rose 2.8% from the previous year, the gains easing for the first time in two months.
Although inflationary pressures appear to be gradually fading in Japan amid stabilizing energy prices, the indicator for prices is still above the Bank of Japan's target of 2%.
High on regional investors' minds is the speech by U.S. Federal Reserve Chair Jerome Powell, scheduled for later in the day. He'll be speaking at an event in Jackson Hole, Wyoming, that has been the site of major policy announcements by the Fed.
Reports on the U.S. economy were mixed. One showed fewer U.S. workers applied for unemployment benefits last week. Another said orders for long-lasting manufactured goods slumped by more last month than economists expected.
For now, weaker-than-expected reports on the economy may be more welcome in financial markets. The economy has managed to avoid a long-predicted recession, but the fear is that it's so solid that it will keep upward pressure on inflation.
The Federal Reserve has already raised its main interest rate to the highest level since 2001 in hopes of grinding down high inflation. High rates work to do that by slowing the entire economy and hurting prices for investments.
Hope had built that the Fed's latest rate hike in July would prove to be the last of this cycle, after inflation cooled considerably since peaking above 9% last summer. Traders also have made bets for the Fed to begin cutting rates in early 2024. But a series of stronger-than-expected reports on the economy has diminished those hopes.
Nvidia, one of Wall Street's most influential stocks, released stronger-than-expected profit report, which raised hopes that this year's frenzy on Wall Street around artificial intelligence technology isn't just hype.
Nvidia first stunned the market three months ago when it said the quick adoption of AI would send its revenue soaring in the three months through July. Its sales came in even better than forecast, at $12.51 billion, and the company gave a forecast for the current quarter that again blew past Wall Street's expectations.
In energy trading, benchmark U.S. crude jumped $1.05 to $80.10 a barrel. Brent crude, the international standard, added $1.17 to $84.53 a barrel.
In currency trading, the U.S. dollar edged up to 146.10 Japanese yen from 145.81 yen. The euro cost $1.0800, down from $1.0819.
Source: Associated Press
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