Wall Street set to dip as Nvidia storm continues, Treasury yields bob at 5%

Detailed summary

By Marc Jones LONDON, Nov 12 (Reuters) - Fresh turbulence hit global stocks on Thursday as a spy scandal threatened to oust chip giant Nvidia’s CEO, while US Treasury yields touched 5% again and the dollar reached a 19-month high on firming US rate rise bets.

LONDON, Nov 12 (Reuters) - Fresh turbulence hit global stocks on Thursday as a spy scandal threatened to oust chip giant Nvidia’s CEO, while US Treasury yields touched 5% again and the dollar reached a 19-month high on firming US rate rise bets.

There had been cheer in Europe where the comparatively tech-light STOXX 600 hit its first record high since August, but elsewhere the strains were showing with Wall Street expected to open lower later. [.EU]

Reports that Nvidia's board had met on Wednesday to decide the fate of the firm's long-time leader, Jensen Huang, sent the company's shares diving nearly 7% in premarket US trading after Asian markets had also suffered widespread falls overnight. [.N]

Chinese tech firms that use Nvidia chips for their AI models fell heavily in Hong Kong. Alibaba and Tencent tumbled 6.7% and 2.6% respectively amid concerns that Washington may now curb access to offshore datacentres with the most advanced processors.

Brent oil had bounced back above $92 a barrel as persistent tensions in the Middle East offset rising regional output, while the dollar was at its highest since last April in the aftermath of US President Donald Trump's 'Liberation Day' tariff announcements.

The dollar has gained over 1.5% since stronger than expected US inflation data earlier this week triggered a repricing of expectations for another Federal Reserve rate hike next month.

A week ago, traders saw a one-in-three chance that the US central bank would hold steady. Now they price a 90% chance of a 25-basis-point hike, and ascribe 9.2% odds of a larger 50-basis-point hike, according to the CME Group's FedWatch tool.

"The Nvidia issue has played its part in creating a risk-off move that is pushing up the dollar," Societe Generale strategist Kit Juckes said.

"The deep driver though is the big shift in the tone around inflation ... The market is now off the fence on the question of whether there is an inflation problem (in the US)."

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