US EQUITY OPEN: NVDA/CSCO gains support Tech after Trump/Xi summit
STOCK SPECIFICS:
- Nvidia (NVDA) CEO Huang said China meetings were “excellent” & US reportedly approved ~10 Chinese firms to buy H200 chips, but Bessent later said “would be news to him”
- Cisco (CSCO): EPS & rev. beat, issued stronger-than-exp. guidance, highlighted surging AI infrastructure orders despite announcing job cuts.
- US Treasury Bessent, on trade w/ China, thinks there will be large Boeing (BA) orders
- Whirpool (WHR) downgraded at Goldman Sachs to 'Neutral' from 'Buy'.
- Take-Two Interactive (TTWO) GTA 6 pre-order emails have reportedly been sent out to some with a pre-order window between May 18th-21st
- Fiserv (FISV) to develop first-party agents with OpenAI on the Agentos platform
- Klarna (KLAR): Rev. & GMV topped
STOCK SPECIFICS:
US indices opened in the green with the Nasdaq 100 and Technology outperforming and buoyed by gains in Cisco and Nvidia after CEO Huang’s visit to China, alongside Trump. Regarding the Trump/Xi summit, the tone was clearly constructive, but tangible policy progress still appears limited for now, with Trump avoiding mentioning Iran entirely. Middle East updates have been limited, while focus in the UK continues to remain around PM Starmer, as Health Secretary Streeting has now resigned. Sectors are predominantly in the green, with Communications lagging. The Dollar is firmer, with G10 FX getting hit, as Aussie lags and hit in recent trade, with USD/JPY now sitting around 157.50 after seeing a sharp drop from 158.20 in recent trade. The crude complex is more-or-less flat, paring earlier losses with WTI on a USD 100/bbl handle and Brent USD 105. Treasuries are firmer across the curve. Precious metals are lower, spot gold only seeing marginal losses, but silver observing more notable losses. On the data footing, initial jobless claims rose, but still indicating a stable-to-improving job market, while import/export prices jumped, showing more signs energy costs are feeding through to other parts of the economy. Retail sales headline M/M was in line, although Oxford Economics highlights that the details were stronger and upward revisions to past months mean real consumer spending is now tracking close to 2% annualized in H1, which is unspectacular, but solid.
The US equity market is buoyed by positive signals following the Trump/Xi summit, particularly supporting tech stocks like Nvidia and Cisco. However, while the tone appears constructive, meaningful policy changes remain elusive, which may keep market expectations in check. The overall outlook for sectors is cautiously optimistic, yet underlying economic data suggests a stable job market and consumer spending may not be robust enough to drive significant shifts in policy or rates.