Morning Wrap: ASX 200 Set to Rise, Nvidia Rallies on Q1 Earnings, S&P 500 Slips

ASX 200 futures are up 13 points (+0.15%) as of 8:30 am AEST.
In Brief
- Major US benchmarks ended broadly lower due to weak US-EU trade negotiations and tepid demand for Japanese 40-year bonds
- Nvidia beat Q1 expectations, pushing US futures ~0.5% higher
- Markets weighed down by weak bond auctions and cautious central bank tone
Overnight Markets Recap
- US benchmarks closed near session lows
- All S&P 500 sectors fell; Equal-weight S&P underperformed by 29 bps
- Modest pullback after a 2.05% rally in the previous session
- EU flagged bleak trade talks with the US
- Weak demand in Japan’s 40-year bond auction drove global yields higher
- Nvidia rose ~4% after hours on strong earnings
- S&P 500 and Nasdaq futures up 0.36% and 0.65%, respectively
- Weak JGB auction may prompt Japan to reduce long-dated bond issuance
- Market sentiment buoyed by belief Trump-era trade wars have peaked, though valuations face scrutiny
Nvidia Earnings Beat
- Q1 Revenue: $44.0bn (+69.2% YoY) vs. $43.3bn est.
- Data Centre Revenue: $39.1bn (+73.3%) vs. $39.2bn est.
- EPS: $0.96 vs. $0.93 est. (+2.7%)
- Gross Margin: 71.3% vs. 70.2% est. (+108 bps)
- Q2 Revenue Guidance: $45bn (+49.8% YoY) vs. $45.5bn est.
- Q2 Gross Margin Guidance: 72.0% vs. 71.7% est.
Key Commentary from Nvidia CFO:
“AI workloads have transitioned strongly to inference… Major hyperscalers deploying ~72,000 Blackwell GPUs per week.”
“OpenAI, Microsoft, and Google are experiencing exponential token generation growth. Microsoft processed over 100 trillion tokens in Q1 — a 5x YoY increase.”
Stocks in Focus
- Apple: Set to debut iOS 26 and macOS 26 as part of a major rebrand
- LVMH: Warns of reduced Chinese travel and overseas spending
- Exxon: Continues investment in oil even at $50/barrel
Central Banks
- US Fed: May FOMC minutes show caution toward rate cuts
- BOJ: Governor Ueda monitoring impact of rising super-long bond yields
- RBNZ: Cuts interest rates for sixth consecutive meeting to 3.25%
Global Trade and Tariffs
- EU and US in talks over steel, chips, aircraft deals
- EU likely to reverse Trump-era reciprocal tariffs
- Political resistance dims hopes for US-EU trade deal in 2025
- Over 70% of US small/mid-sized firms report rising costs from tariffs
- Japan offers to purchase US chips in trade talks
- UK seeks tariff relief, Trump firm on 10% export baseline
- India offers partial tariff cuts, retains protection on key agri goods
Economic Data Highlights
- Eurozone Inflation: Rose to 3.1% in April, highest since Feb 2024
- France: Consumer spending rose 0.3% in April, below forecast
- Australia: April monthly CPI at 2.4% vs. 2.3% expected
- IKE Group: FY25 subscription revenue up 48%, receives unsolicited buyout offer
- Resolute Mining: No formal response from Guinea on revoked exploration permits
What to Watch Today
- Market Sentiment: ASX 200 gave back yesterday’s 0.54% gain. Higher yields, VIX, and USD may weigh on equities.
- Nvidia Impact: Strong Q1 earnings and bullish AI outlook could lift local tech names like NextDC, Goodman Group, and Digico.
Broker Rating Changes
- ALS (ALQ): Downgraded to Neutral from Buy, target cut to $17.70 (from $17.80) – Goldman Sachs
- Genesis Minerals: Upgraded to Outperform from Neutral, target lifted to $5.10 (from $4.20) – Macquarie
- Web Travel Group: Upgraded to Outperform from Neutral, target raised to $6.19 (from $4.83) – Macquarie
Key Corporate Events Today
Stocks Trading Ex-Dividend
Thursday, 29 May:
- 360 Capital Mortgage REIT (TCF): $0.06
- Otto Energy (OEL): $0.001
- Technology One (TNE): $0.066
Friday, 30 May:
- MA Credit Income Trust (MA1): $0.015
- Metrics Master Income Trust (MXT): $0.014
- Metrics Income Opportunities Trust (MOT): $0.017
- Metrics Real Estate (MRE): $0.009
- Pengana International Equities (PIA): $0.014
Other Corporate Actions
- Dividends Paid: Acrow (ACF), Autosports Group (ASG), Clime Investment Management (CIW)
- Earnings Releases: Champion Iron (CIA), Select Harvests (SHV)
- IPOs/AGMs: None scheduled