Asian Stock Markets Decline, Investors Focus on Nvidia

Decline in Asian Stock Markets and the Importance of Nvidia

Asian stock markets fell, following losses on Wall Street, as investors grew concerned over skyrocketing technology valuations. This week, investors are focusing on the upcoming financial report from Nvidia, questioning expectations in the artificial intelligence sector.

This year’s record rally has raised uncertainties over whether investments in artificial intelligence will yield significant returns, while the possibility that the Federal Reserve may not make a third interest rate cut decision next month has further fueled market anxiety. Weakness in the labor market, combined with high inflation, has left investors feeling uneasy.

Two important reports are drawing attention this week. On Wednesday, Nvidia, a leader in the artificial intelligence field, will present its latest financial statement in detail; this report is expected to provide insights into the sector's future. Meanwhile, the earnings of Home Depot, Target, and Walmart will shed light on consumer sentiment.

Peter Thiel's hedge fund's complete sell-off of Nvidia stocks revealed that approximately $100 million worth of shares were disposed of, shaking the markets. Neil Wilson from Saxo Markets noted that analysts are hopeful ahead of the report, but expectations are quite high. In an environment where investors are jittery, any weak financial results from Nvidia could lead to significant declines in the markets.

On Thursday, the U.S. September employment report, which was delayed due to the government shutdown, is expected to be released. This data will provide an updated view of the world's largest economy and evaluate the possibilities of new interest rate cuts. The likelihood of a rate cut occurring in December is around 50%, but Federal Reserve officials emphasize that concerns about inflation are more pressing than those regarding the labor market.

Jerome Powell stated last month that another cut at the December policy meeting is 'not inevitable.' Christopher Waller expressed that the September employment report or other upcoming data in the following weeks would not change the view that another interest rate cut is necessary.

Following a day of losses on Wall Street, Asian stock markets are exhibiting negative trends. Tokyo, Sydney, Seoul, and Taipei lost over 1%, while significant losses were also seen in Hong Kong, Shanghai, Singapore, and Wellington. The cryptocurrency Bitcoin is trading at around $91,300 in risk-averse markets and has completely lost its gains since the beginning of the year, showing a decline of more than 25% from its record level in September ($126,251).