Australia

Australian shares are set to decline this morning following losses in the US. After Nvidia’s strong but brief boost Thursday morning, shares of the chip manufacturer closed only 0.1% higher. Meanwhile, investors looked toward Federal Reserve Chair Jerome Powell’s speech on Friday at the Jackson Hole Economic Symposium. Further policy tightening appeared likely, given the consistently tight labor market in the US.

ASX futures were down 92 points or 0.9% as of 6:00am on Friday, indicating a slump at the open.

Nvidia's record quarter was not enough to lift the US stock market on Thursday.

The S&P 500 initially looked set to build on its best day since June, but finished 1.3% lower. Each of the benchmark's 11 sectors closed in the red. Air came out of big tech stocks: Shares of Tesla and Amazon.com, which comprise hefty portions of the market, dragged down the Nasdaq Composite to a 1.9% loss.

Disney shares extended this year's rout, falling 3.9% to their lowest close in nearly nine years. Those losses weighed on the Dow industrials, which slid 1.1%. Canadian shares also fell, with the S&P/TSX Composite declining 0.5%.

Nvidia gained just 0.1% after its 3.2% rise the prior day. The graphics-chip maker at the heart of the artificial-intelligence boom reported record sales that doubled from a year ago. Nvidia looked set for a big bounce, reaching its highest level on record during trading, but those gains fizzled as investors took profits on their positions.

In commodity markets, Brent crude oil was unchanged at US$83.21 a barrel while gold added 0.1% to US$1,916.71.

Australian government bonds were lower, with the 2 Year yield slipping to 3.83% and the 10 Year yield backtracking to 4.11%. US Treasury notes were higher, with the 2 Year yield increasing to 5.02% and the 10 Year yield advancing to 4.24%.

The Australian dollar slipped to 64.14 US cents from its previous close of 64.78. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies, inched higher to 98.50.

Asia

Chinese shares ended higher, rebounding from a recent selloff as investor sentiment was weighed by the country's sluggish economic data. Investors were looking for more concrete policy support from Beijing to shore up the economy. Chip makers and consumer brands led the gains. Semiconductor Manufacturing International Corp. gained 1.5% and Kweichow Moutai increased 2.4%. Among losers were telecoms and infrastructure companies. China Mobile declined 1.2% and China Unicom dropped 2.95%. China National Nuclear Power fell 3.6%. The benchmark Shanghai Composite Index ended 0.1% higher at 3082.24. The Shenzhen Composite Index rose 0.5% and the tech-heavy ChiNext Price Index gained 1.3%.

Hong Kong shares closed higher, led by semiconductor stocks, after chipmaker Nvidia posted blockbuster 2Q results that beat estimates and issued optimistic guidance for 3Q. Semiconductor Manufacturing International Corp. rose 4.5% and Hua Hong Semiconductor climbed 2.8%. The Hang Seng Tech index advanced 3.7%, with Lenovo Group up 5.7% and Baidu gaining 4.7%. Country Garden Holdings rose 10%. Investors were looking towards the US Federal Reserve's economic symposium on Friday, where Fed Chair Jerome Powell will deliver the opening remarks. ANZ analysts expect Powell to "err on the side of caution with respect to inflation, noting some signs of improvement but still with a long way to go." The benchmark Hang Seng Index ended 2.05% higher at 18212.17.

Japanese stocks ended higher, led by gains in electronics and tech shares, as Nvidia's strong results spurred buying into chip-related companies and as concerns eased about borrowing costs. Lasertec gained 3.7% and SoftBank Group climbed 2.7%. The Nikkei Stock Average rose 0.9% to 32287.21.

India's benchmark Sensex index fell 0.3% to close at 65252.34, reversing earlier gains as investors became cautious ahead of the Jackson Hole Economic Symposium. Investors anxiously awaited further clues on US monetary policy from the symposium, explained Priyanka Sachdeva, senior market analyst at Phillip Nova, in an email. Among the worst performers on the benchmark index, Jio Financial Services dropped 5.0%, Reliance Industries fell 1.8% and Power Grid Corp. of India was down 1.3%.

Europe

Most European markets fell after upbeat trading in Asia. Wall Street also appeared set to open lower on Thursday. The pan-European Stoxx Europe 600 and the French CAC 40 both dropped 0.4% while the German DAX closed 0.7% in the red.

The United Kingdom’s FTSE 100 was Europe’s only major index closing in the green on Thursday, rising 0.2% to 7,333.63 points. A Nvidia-fuelled bounce saw the index rise as much as 0.9% earlier in the session.

"That sugar rush has faded somewhat as the day has progressed with shares retreating from their intraday highs, and bond yields edging back up again," CMC Markets UK's Michael Hewson wrote in a note.

London’s blue-chip index's outperformance of peers may have also been fuelled by the weakness in the pound, as it is one of the only European indices to finish in the green after early gains, Oanda's Craig Erlam wrote. The performance of its defensive stocks also helped the FTSE hang on to gains, despite growth concerns that weighed on the basic resource sector and the drag from low copper prices on miners.

North America

Nvidia's record quarter was not enough to lift the US stock market on Thursday.

The S&P 500 initially looked set to build on its best day since June, but finished 1.3% lower. Each of the benchmark's 11 sectors closed in the red. Air came out of big tech stocks: Shares of Tesla and Amazon.com, which comprise hefty portions of the market, dragged down the Nasdaq Composite to a 1.9% loss.

Disney shares extended this year's rout, falling 3.9% to their lowest close in nearly nine years. Those losses weighed on the Dow industrials, which slid 1.1%. Canadian shares also fell, with the S&P/TSX Composite declining 0.5%.

Nvidia gained just 0.1% after its 3.2% rise the prior day. The graphics-chip maker at the heart of the artificial-intelligence boom reported record sales that doubled from a year ago. Nvidia looked set for a big bounce, reaching its highest level on record during trading, but those gains fizzled as investors took profits on their positions.

The company's shares -- which have more than tripled this year -- might have reached a valuation on par with its rosy earnings picture, leaving less room to further appreciate and lift broader indices.

"Nvidia's results weren't good enough to justify its valuation," said David Trainer, chief executive of investment research firm New Constructs.

The stock opened Thursday at more than $500 a share. That means the company would need to increase revenue by an average of 20% a year for the next 25 years, according to Trainer.

"That is an extremely high bar, even with its AI prowess," he added.

Meanwhile, precarious signs for the economy's trajectory are emerging, just as the Federal Reserve kicks off its Jackson Hole Symposium.

New orders for long-lasting goods fell 5.2% in July, the steepest slump since April 2020 and worse than the 4.1% slide expected by Wall Street Journal-polled economists. The prior day, an S&P Global report showed business activity fell to a six-month low in August.

Manufacturing is becoming worrisomely weak in the US even as the labor market remains strong.

Unemployment filings fell last week and remain near historic lows, another sign that the Fed's tightening has yet to unravel the US labor market. Thursday's stock slump might be the first inkling of investor worry that the market cannot withstand higher interest rates for much longer.

"Equities look like they had priced in a soft landing, but that picture can get distorted by such large tech stocks driving the market-cap weighted indices," said Mark Heppenstall, chief investment officer of Penn Mutual Asset Management.

Heppenstall says a recession is not on the horizon unless the labor market cracks. He's eager to see the August jobs figures, due next week. Should they come out strong again, "it's hard not to see 'higher for longer' growing as the Fed's mantra," he said.

Along with many investors, Heppenstall will be tuned into Fed Chair Jerome Powell's speech slated for Friday for insights into the potential path of interest rates. He does not expect Powell's tough talk on inflation to subside, and his firm has been buying inflation-adjusted Treasury notes to benefit from the recent surge in yields.

Bonds mostly pared some of Wednesday's gains, as long-term yields retraced what was the biggest one-day slide since May. The 10 Year US Treasury yield climbed to 4.234% from 4.197% on Wednesday. Traders say they are waiting for Powell's speech to jump into action.