Nvidia has a caretaker in charge, Cisco has reminded everyone that AI orders are still pouring in, and yet the most important number of the day has nothing to do with chips. Jensen Huang’s exit hit Wall Street hard at Thursday’s open before the damage was trimmed, but the bigger warning came from the US bond market, where a weak 30-year auction pushed the 10-year Treasury yield back above 5.1 per cent. With the New York Fed’s John Williams saying more rate rises are likely, Friday’s US producer price figures at 13:30 UK time now decide whether this week ends with relief or with a fresh leg up in borrowing costs.
The 60-Second Market View
US shares slipped on Thursday. The S&P 500 fell 0.35 per cent to 7,592.40, the Nasdaq Composite lost 0.39 per cent and the Dow gave up 0.36 per cent, while the smaller companies in the Russell 2000 dropped 1.66 per cent, a sign that higher borrowing costs bite hardest away from the giants. The VIX volatility gauge rose to 18.70.
Europe did better. The Stoxx 600 edged up 0.1 per cent to another record close, the FTSE 100 added 0.25 per cent to 10,863.09 and the DAX gained about 0.4 per cent. This morning, Euro Stoxx 50 futures are down around 0.4 per cent, S&P 500 futures are barely changed and Nasdaq 100 futures are a touch lower. Brent crude is holding near $95.50 after Thursday’s 3.3 per cent jump, gold has climbed about 1 per cent to roughly $3,914 and Bitcoin has fallen around 4 per cent to near $68,300.
What Happened Overnight?
Nvidia confirmed on Thursday that Jensen Huang had resigned as chief executive and left the board with immediate effect, ending a 33-year run at the company he co-founded. Chief financial officer Colette Kress becomes interim chief executive while keeping her finance role, and long-serving director Harvey Jones becomes the board’s first-ever chair. The board will look at internal and external candidates for the permanent job. The shares fell as much as 14 per cent at the open, then recovered much of that to close down about 4.3 per cent.
That recovery matters. Broadcom and AMD outperformed again, and after the close Cisco beat expectations comfortably, with adjusted earnings of $1.40 a share against $1.33 expected and revenue up 24 per cent to $18.5 billion. Applied Materials, which sells the machines that make chips, reported record quarterly revenue and guided higher. Cisco shares jumped in after-hours trading. The message from the companies doing the spending is that AI demand has not gone anywhere, even if the market has lost its most famous salesman.
Asia took that cue, at least at first. Tokyo’s Nikkei and Taiwan’s main index both rose, with TSMC higher, but the MSCI Asia Pacific index gave up an early gain of as much as 1.1 per cent as bond yields climbed across the region. Hong Kong fell around 0.9 per cent and Australia about 0.7 per cent. Chinese technology names were weaker on worries that Washington could tighten access to advanced chips.
The Big Story: The Bond Market Has the Final Word This Week
Strip out the Nvidia drama and the week has been about one thing: US inflation refusing to cool. Consumer prices came in hotter than expected on Tuesday, and on Thursday investors gave the US government a lukewarm reception at its 30-year bond auction, with demand noticeably weaker than average. The 10-year yield ended the day around 5.12 per cent and the two-year near 4.86 per cent.
Williams, who is usually a good guide to where the centre of the Federal Reserve sits, said late on Thursday that the economy is strong, the jobs market is still improving and inflation is persistent. He said the Fed still has work to do and that further increases are likely, without committing to timing or size. Markets now fully price a quarter-point rise at the 9 December meeting, from the current 3.75 to 4 per cent range, and have started to put meaningful odds on a half-point move.
That is why today’s producer price index matters more than usual. It measures the prices businesses charge each other, so it often shows inflation before it reaches shoppers. Economists expect headline prices to rise 0.4 per cent in October after a 1.3 per cent jump in September, with the yearly rate climbing to about 6.6 per cent. Core prices, which strip out food and energy, are expected to rise 0.3 per cent. A figure at or below those forecasts would give bonds and growth shares some breathing room. A hot one would strengthen the case for a bigger December move and push yields higher again, and that is the scenario the market looks least prepared for heading into the weekend.
The second-order effect is worth spelling out. Higher yields make future profits worth less in today’s money, which is why expensive technology shares and smaller companies feel the squeeze first. They also strengthen the dollar and pull money away from assets that pay nothing, such as Bitcoin. Gold’s bounce this morning comes after it fell to its lowest level in about a year on Thursday, so it is a relief move rather than a change of direction until yields stop rising.
FX
The dollar index is steady around 103.15, close to its strongest level in about 18 months. Sterling is near $1.3231, while the euro trades around $1.1061, leaving the pound slightly weaker against the euro at about 85.8 pence. The yen is the pressure point: the dollar is near 159.90 yen after a third straight daily fall for the Japanese currency, and talk of official intervention is growing as the 160 area comes into view. A hot US inflation figure would test that line quickly.
Equities
The split between Europe and the US is the story of the month. European shares keep setting records as investors rotate away from crowded AI trades, and Burberry’s 8 per cent jump on Thursday showed there is appetite for recovery stories at home. US futures point to a quiet open for now, but Nvidia remains the stock to watch: a steady session under its new leadership would suggest the worst of the governance shock is behind it, while fresh selling would show investors still doubt there is a clear successor. Japan’s big banks report results today, and higher global yields are generally good news for their lending margins.
Bonds
Yields are rising almost everywhere. Japan’s 10-year yield climbed about seven basis points to 2.87 per cent and Australia’s rose about nine, both following Thursday’s Treasury sell-off. UK gilts are not immune: the 10-year gilt yield is near 5.28 per cent and the two-year near 4.96 per cent. After this week’s strong UK growth figures, the Bank of England has less reason to sound relaxed, so any jump in US yields this afternoon is likely to spill over into gilts and mortgage pricing.
Commodities
Oil is caught between two stories. Brent settled at $95.82 on Thursday, up 3.3 per cent, after President Trump wrote that the US does not need a deal with Iran and Houthi attacks on Saudi energy facilities raised supply worries. Even so, Brent is on course for a second weekly fall of around 2.4 per cent after a 16 per cent slide the week before, because more crude has been flowing out of the Gulf. The International Energy Agency’s monthly report at 09:00 UK time will show how much damage it thinks the war is still doing to supply. Gold is near $3,914 and silver around $50.
Crypto
Bitcoin has dropped about 4 per cent to around $68,300 and Ether nearly 5 per cent to about $1,918. With yields climbing and the dollar firm, crypto is behaving like the riskiest corner of the market rather than a hedge, and it is worth watching as a gauge of how much appetite for risk is left into the weekend.
Today’s Economic Calendar
All times UK.
09:00 – IEA monthly oil market report – A fresh view of supply and demand during the Iran war; a tighter outlook would support oil and inflation fears.
13:30 – US producer prices for October – The day’s main event; forecasts are 0.4 per cent for headline and 0.3 per cent for core. The gap between the result and those forecasts will drive yields, the dollar and growth shares.
14:10 and 14:40 – Fed’s Collins and Logan speak – Logan has argued for more tightening; any support for a half-point move in December would move markets.
15:50 – Fed Vice Chair for Supervision Bowman speaks – Another voice on how far rates need to rise.
17:00 – Fed’s Daly speaks – She favours gradual increases, so a shift in tone would be notable.
18:00 – Baker Hughes rig count – A guide to how US oil producers are responding to higher prices.
Levels Traders Are Watching
These are reference points, not predictions or targets. For the S&P 500, the 7,600 area is the first line, with Wednesday’s 7,619 close just above it. On the US 10-year Treasury, 5 per cent is the level that has calmed markets when yields dip below it. For Brent, $95 is the pivot and $90 the floor that briefly gave way on Wednesday. Gold’s area around $3,880, Thursday’s one-year low, is the level that matters for the bounce. In currencies, $1.32 for sterling and 160 for the dollar against the yen are the lines most likely to attract attention, the latter because of intervention risk.
Where This Leaves Traders
Our judgement is that the market has handled the loss of Nvidia’s founder better than many feared, and that the real risk into the weekend is in bonds, not boardrooms. The bias is cautious: AI demand looks intact, but rising yields are doing the heavy lifting against shares, the pound and anything that pays no income. A producer price figure in line with forecasts, a steady Nvidia and the 10-year yield easing back towards 5 per cent would change that view and open the door to a calmer finish to the week. A hot figure, meanwhile, would likely push the dollar and yields higher and put fresh pressure on technology shares and the yen.
The markets to watch today are the US 10-year yield, the dollar against the yen, Nasdaq 100 futures, Brent crude and gold. The opportunity lies in how quickly prices react to a surprise this afternoon; the risk is being positioned too heavily before 13:30, when a single number can reverse the morning. For newer traders, the lesson of this week is simple: big company headlines grab attention, but interest rates usually decide where markets go next.
If you want to understand how your own approach would cope with a day like this, and where your trading has room to improve, take the free Samuel & Co Trading Trader Assessment and get a clear view of your strengths and gaps.
