Yields, stocks sag as ‘Tariff Man’ flexes muscles, Nvidia reports

The Asia-Pacific economic and corporate calendar is virtually empty on Thursday, allowing investors to take their cue from global drivers, two of which stand out above all others – Nvidia’s earnings and US President Donald Trump’s latest musings on tariffs.

Nvidia reported fourth-quarter earnings after the market close on Wednesday. Revenue grew 78% to USD 39.3 billion, beating estimates of USD 38.04 billion, and the firm’s forecast for first-quarter revenue was also above market estimates. Shares in the artificial intelligence poster child were little changed in choppy, after-hours trading.

Shares in Wall Street’s ‘Magnificent Seven’ and Big Tech more broadly – the runaway market winners over the last two years – have been under heavy pressure this year as investors rotate into unloved sectors at home and cheaper markets abroad.

Indeed, the ‘Mag 7′ this week entered correction territory having fallen more than 10% from their recent peak, so recovery hopes rested almost exclusively on Nvidia. Tech bulls may be disappointed.

Also in US tech, Tesla shares have shed nearly 20% in less than a week, slammed on the news that the electric car maker’s sales in Europe nearly halved last month. Some analysts suggest the slump was due to frustration in Europe about CEO Elon Musk’s close ties to Trump and political involvement in European countries’ domestic affairs.

Investors were on the defensive before Nvidia’s results, after Trump said earlier that he will soon announce a 25% tariff on imports – “on cars, and all of the things” – from the European Union.

Trump also said that steep new tariffs on imports from Mexico and Canada will go ahead on April 2, a month later than he had initially indicated. But a White House official later clarified that the March 4 deadline remained in place “as of this moment”.

‘Tariff Man’ is not for turning. Not yet anyway.

It was interesting to note that although Wall Street opened firmer on Wednesday and was recouping some of its losses from earlier this week, Treasuries didn’t budge. This suggests the fleeting equity rebound was more short-covering than anything else, and that the bond market wasn’t changing its view.

But bond investors did react to Trump’s tariff remarks. The renewed decline in yields suggests they believe escalating trade tensions will hit growth more than they will stoke inflation. At least in the near term.

Most equity markets in Asia, except Japan, posted solid gains on Wednesday. But the region is set to slide into the red at the open on Thursday as investors play safe. Treasuries up, dollar up – the big macro moves in US regular trading hours on Wednesday don’t get much safer.

Here are key developments that could provide more direction to Asian markets on Thursday:

– Fallout from Trump’s latest tariff threats

– G20 finance ministers, central bank governors meeting

– US GDP (Q4, second estimate)

(By Jamie McGeever, editing by Bill Berkrot)