Stock market today: Dow, S&P 500, Nasdaq futures fall as Trump moves to oust Fed governor

⚙️ Nvidia results to spotlight fallout of China-US trade war:

Nvidia's business in China will be the focus of investors when the AI chipmaker reports earnings on Wednesday, following an unusual deal with the Trump administration and Beijing's subsequent efforts to stall imports.

Caught in the crossfire of Washington and Beijing's ongoing trade war, the fate of Nvidia's China business hangs on where the world's two largest economies land on tariff talks and chip trade curbs. The artificial intelligence chip pioneer recently agreed to pay the U.S. federal government 15% of the sales it made it China in exchange for export licenses, a move that has drawn bipartisan criticism.

Beijing - despite huge appetite for Nvidia's chips in China - has urged domestic companies to limit purchases over apparent security concerns. Yahoo Finance reports.


🏦 Morgan Stanley joins global peers with September Fed rate cut outlook as Powell shifts tone:

Morgan Stanley has joined a growing bloc of global brokerages forecasting a September interest rate cut by the U.S. Federal Reserve, citing Chair Jerome Powell's shift in tone toward labor market risks at the Jackson Hole symposium.

In a note dated Monday, the brokerage said Powell's tone marked a departure from his earlier emphasis on inflation persistence and low unemployment, suggesting the Fed may move preemptively to manage downside risks to the labor market.

Morgan Stanley now forecasts two 25-basis-point rate cuts this year, one in September and another in December, followed by quarterly 25bp reductions through 2026, bringing the benchmark interest rate to 2.75%-3.0%. Reuters reports.


💳 Klarna to seek valuation of up to $14 billion in IPO next month, sources say:

Swedish fintech Klarna (KLAR.PVT) will restart its plan to go public in the United States next month with a valuation of between $13 billion and $14 billion, according to two sources familiar with the matter.

The company paused its IPO plans in April after U.S. President Donald Trump's sweeping tariffs rattled global markets. It had also looked at going public in 2021 but decided not to proceed.

The shares sold in the offering could be priced at between $34 and $36 as early as this week, the sources said.

That would be a sharp drop from the valuation of close to $50 billion Klarna was aiming for in 2021 and down from more than $15 billion earlier this year. One of the sources said Klarna is looking to raise close to $1 billion from the IPO. Yahoo Finance reports.


🏛️ Long-dated Treasuries drop on concern over inflation, Fed’s Cook:

Long-dated US Treasuries fell as President Donald Trump intensified efforts to oust Federal Reserve Governor Lisa Cook, exacerbating investor concerns his attacks on the central bank’s independence and lobbying for lower interest rates will end up fanning inflation.

The yield on 30-year bonds rose, reflecting the market’s expectation that price pressures could sharpen if Trump were to succeed in replacing Cook with a policymaker more inclined to lower borrowing costs. Trump has repeatedly complained that Fed Chair Jerome Powell and his colleagues have been too slow to cut rates.

Trump’s move is a reminder that the US administration “remains unconventional and unpredictable,” said Andrew Ticehurst, senior rates strategist at Nomura Australia Ltd. The market is concerned the Fed board could become “stacked with doves,” boosting the compensation investors demand to hold US debt, he said. Yahoo Finance reports.


➡️ Small caps are finally getting rate cuts, but they might still be left behind:

Small-cap stocks are finally playing catch-up, leaving a market — which has been burned before — wondering if this time is for real.

Fed Chair Jerome Powell reenergized the stock market on Friday as investors took his Jackson Hole remarks as a wink and a nod that a cut will be coming in September. Not surprisingly, interest rate-sensitive areas surged ahead, putting the small-cap Russell 2000 index up around 4% over the past month.

The boost is a long time coming. While the S&P 500 (^GSPC), Nasdaq (^IXIC), and even the Dow (^DJI) have enjoyed plenty of record highs recently, the euphoria has not trickled down. The Russell 2000 (^RUT) hasn't seen a record close since 2021, despite nearly making it back to the top last fall before crashing once again as the trade war took off. Yahoo Finance reports.


🚗 Nissan shares fall over 6% as Mercedes-Benz plans to shed its stake in Japanese automaker:

Nissan Motor shares tumbled on Tuesday after Mercedes-Benz announced plans to offload its 3.8% holding in the Japanese automaker. Tokyo-listed shares of Nissan declined as much as 6.7% before paring some losses to trade 6% lower.

Mercedes-Benz’s pension trust will divest its stake worth roughly $346 million in Nissan Motor, a company spokesperson reportedly said on Monday.

The spokesperson added that Nissan holdings, which were moved into pension assets in 2016, were not strategically significant while framing the sale of the remaining 3.8% stake as part of a portfolio cleanup. Nissan stake makes up 2.7% of the company’s total holdings, with Diamler Truck constituting nearly 93%. CNBC reports.


⚡ Tesla rejected $60 million settlement before losing $243 million Autopilot verdict:

Billionaire Elon Musk’s electric vehicle company Tesla rejected a $60 million settlement proposal in a lawsuit over the 2019 fatal crash of an Autopilot-equipped Model S before a jury this month awarded a $243 million verdict in the case.

Lawyers for the plaintiffs disclosed the settlement proposal in a filing on Monday in the federal court in Miami, Florida, as part of a request for legal fees from Tesla. They said Florida law entitles them to the legal fees the plaintiffs accrued since May 30, when the settlement was proposed.

Tesla and a lawyer representing the company in the case did not immediately respond to requests for comment. Attorneys for the plaintiffs had no immediate comment. Yahoo Finance reports.


💊️ A world on weight loss drugs: How GLP-1s are reshaping the economy:

Miracle drugs, obesity treatments and skinny jabs. Call them what you will, few drugs have had a more transformative effect on Wall Street and waistlines over recent decades than GLP-1s.

Familiarly known under the brand names Wegovy and Zepbound, Glucagon-like peptide-1 (GLP-1) receptor agonists are a class of medication used to treat type 2 diabetes and obesity by mimicking hormones produced in the gut to suppress a person’s appetite and regulate blood sugar.

Since Wegovy first received U.S. approval to treat obesity in 2021, and Zepbound in 2023, the drugs have skyrocketed to fame, bringing long-sought solutions to tens of millions of patients and supercharging the growth of respective parent companies Novo Nordisk and Eli Lilly. CNBC reports.

“Even in those earlier times, finding the really outstanding companies and staying with them through all the fluctuations of a gyrating market proved far more profitable to far more people than did the more colorful practice of trying to buy them cheap and sell them dear.”

- Philip A. Fisher

Sourced in: “AZ Quotes”

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