Trading Day: US rate outlook trumps everything
- ANTH.PVT
- NVDA
- CL=F
(Corrects ‘Today’s Key Market Moves’ section to say US yield curve flattens, not steepens)
ORLANDO, Florida, Nov 10 (Reuters) – US stocks bucked the global trend and fell on Tuesday, after another bout of surprisingly hot US inflation sparked a surge in bond yields and stoked expectations that interest rates might rise more quickly than envisaged.
This offset the decline in oil prices to a two-month low, and overshadowed big AI-related developments surrounding the Nvidia controversy and Anthropic’s planned public listing.
• EXCLUSIVE-Anthropic eyes $1.4 trillion IPO valuation in test of Wall Street’s AI fervor
• Nvidia’s clubby board faces a sticky ‘honey pot’ test
• US consumer prices rise briskly for third straight month
• AI debt faces pressure as Democrats prepare to take over Congress
• China’s trade surplus soars past $1 trillion as AI boom powers exports
• Today’s Key Market Moves STOCKS: Japan +3%, China flat. Europe +0.3% near record high, UK -0.3%. Nasdaq -0.7%, S&P 500 -0.4%, Dow -0.3%.SECTORS/SHARES: Six sectors in the S&P 500 fall, five rise. Tech -1.4%, financials +0.5%. Nvidia -5.5%, Skydance -7.5%. CoreWeave up after results. Charter Communications +11%.FX: US dollar rises. Biggest G10 decliner is Aussie dollar, -0.9%; biggest EM decliners Chilean peso -2%, Brazilian real -1.5%.BONDS: US yields spike sharply, 2-year yield +20 bps, curve flattens. Mixed 10-year auction.COMMODITIES/METALS: Oil -1%. Gold -3%
The extraordinary story around Nvidia CEO Jensen Huang’s personal relationship with an alleged Chinese spy continues to weigh heavily on the company’s share price, which tumbled another 5.5% on Tuesday. That takes its total decline from the all-time high on October 6 to 31%. Or put another way, around $1.7 trillion of market cap lost in barely a month.
But bearing in mind Nvidia’s record footprint on Wall Street, it’s also extraordinary how well the wider market has held up. On October 6, Nvidia shares, the Nasdaq and S&P 500 hit all-time highs. If you were told that Nvidia shares would then fall more than 30% in just over a month, would you expect the Nasdaq to be down less than 10% and the S&P 500 just 4% lower? Unlikely.
IPO, IPO, it’s off to work we go
We finally have the Anthropic IPO valuation: $1.4 trillion. That’s the top of the price range, on a fully diluted basis including securities such as stock options and restricted stock. Or, on a non-diluted basis excluding those securities, Anthropic’s market value based on its proposed float would be about $1 trillion. That’s quite a considerable fall from some of the more giddy estimates in recent weeks of up to $2 trillion.
