United States: U.S. stocks took another hit on Monday as investor optimism waned following strong job data from Friday. The report, showing a resilient economy, led many to scale back expectations for upcoming Federal Reserve rate cuts, leaving markets on edge. With economic strength still holding, the future of Fed policy—and its impact on the market—remains uncertain.
Economists in Bank of America have washed out any rate cuts and now predict a rate hike to be the next course of action. ‘Current inflation is above target still the Fed was mainly reducing to get a robust job market which has been provided,’ they added in a note. “This means no further cuts needed,” they said, noting they “expect risks for the next Fed move as skewed more to a hike versus cut.”
Chip stocks battered.
As reported by the USA Today, Biden’s administration’s restrictions imposed to new US chip export bogged down the chip darling Nvidia and other semiconductor stocks.
To counter China AI ambitions that could endanger national security the U.S announced that they wish to limit the number of advanced AI chips which could be exported to some nations. This free zone, it said, would exclude 18 key partners and allies.
Despite the fact that companies expressed their dislike towards the framework, with Ned Finkle, Nvidia vice president of government affairs claiming that the proposal is misguided and is likely to slow down innovation and economic growth around the globe.
Under the proposal, the comment period is 120 days, which would overlap with Trump’s inauguration in January. Trump is to be sworn in on Jan. 20.
Nvidia was down 3.77% at USD 130.79, while Intel slid 2% to 18.77.
Oil prices jump
Oil prices extended gains for the third day in a row after new and broader US sanctions on Russian oil threatened to pull India and China into the Middle East Africa and the Americas, which is likely to bump up prices and trans-shipment cost said analysts Meanwhile Brent crude also Logged its third straight day of gains crossing is USD 80 a barrel mark for the first time in more than four months shooting up on the expectation of higher demand and the stronger US dollar.