1. Japan’s benchmark Nikkei 225 was higher after hitting a fresh record high on Thursday.
Shares of SK Hynix jumped Friday after announcing that it had finished developing HBM4, the latest generation of high-bandwidth memory seen as vital for artificial-intelligence applications. Its shares rose over 7% to hit the highest since 2000 as of 9.40 p.m. ET Thursday, marking its ninth day of rally. Hong Kong’s Hang Seng index rose 1.64%, while mainland’s CSI 300 inched 0.19% higher. Shares of Alibaba and Baidu listed in Hong Kong also jumped over 6% and 10% respectively, after both companies began deploying their own in-house chips to train artificial intelligence models, The Information reported Thursday, citing people familiar with the matter.
2. Dow closes up 600 points, setting record, as August inflation increase likely won’t derail Fed rate cut
Stocks rose on Thursday as traders anticipated that the latest reading of a key consumer inflation gauge won’t stand in the way of the Federal Reserve lowering its benchmark interest rate next week. The Dow Jones Industrial Average finished up 617.08 points, or 1.36%, at 46,108.00, while the S&P 500 ended up 0.85% at 6,587.47. The Nasdaq Composite advanced 0.72% to 22,043.07. All three major averages scored new intraday all-time highs in the trading day and closed at record levels. It was a confusing batch of numbers, with the consumer price index reading for August coming in hotter than expected on a monthly basis but in line with expectations on an annual basis The CPI reading showed an increase of 0.4% for the month, according to the Bureau of Labour Statistics, higher than the 0.3% that economists polled by Dow Jones were expecting. However, the index recorded 2.9% on a 12-month basis, as expected.
3. Gold pares losses as labour market weakness bolsters Fed easing expectations
Gold prices pared losses on Thursday, holding at near-record highs as soft U.S. jobs data outweighed concerns from firmer inflation data, with investors still betting on the Federal Reserve easing interest rates next week. Spot gold was down 0.2% at $3,634.96 per ounce. Bullion had hit a record high of $3,673.95 on Tuesday. U.S. gold futures for December delivery fell 0.2% to $3,673.6. U.S. consumer prices rose more than expected in August, recording the largest annual increase in seven months, while weekly jobless claims also jumped sharply, highlighting softening labor market conditions. Data on Thursday showed U.S. producer prices unexpectedly declined in August, reflecting weaker trade services margins and muted goods costs.
4. Oil prices fall on oversupply and weaker US demand
Oil prices fell on Thursday, pressured by concerns over softening U.S. demand and broad oversupply that offset threats to output from conflict in the Middle East and the Russian war in Ukraine. Brent crude futures were down $1.12, or 1.66%, to close at $66.37 a barrel, and U.S. West Texas Intermediate crude futures lost $1.30, or 2.04%, to settle at $62.37. The International Energy Agency said in its monthly report that world oil supply will rise more rapidly than expected this year on OPEC+ increasing output further.
5. Consumer prices rose at annual rate of 2.9% in August, as weekly jobless claims jump
Prices consumers pay for a variety of goods and services moved higher than expected in August while jobless claims accelerated, providing challenging economic signals for the Federal Reserve before its meeting next week. The consumer price index posted a seasonally adjusted 0.4% increase for the month, the biggest gain since January, putting the annual inflation rate at 2.9%, up 0.2 percentage point from the prior month and the highest reading since January. Economists surveyed by Dow Jones had been looking for respective readings of 0.3% and 2.9%. For the vital core reading that excludes food and energy, the August gain was 0.3%, putting the 12-month figure at 3.1%, both as forecast. Fed officials consider core to be a better gauge of long-run trends.
6. Offshore wind has no future in the U.S. under Trump administration, Interior Secretary says
Offshore wind has no future as a source of electricity generation in the United States under the Trump administration, Interior Secretary Doug Burgum said at an energy conference in Italy this week. “Under this administration, there is not a future for offshore wind because it is too expensive and not reliable enough,” Burgum told an audience at the Gastech conference in Milan on Wednesday. It is the clearest statement yet from a senior Trump administration official that the president aims to shut down the nascent offshore wind industry in the U.S. Burgum oversees the leasing and permitting of offshore wind farms in federal waters as head of the Department of Interior. President Donald Trump barred new leases for offshore wind farms on his first day in office through an executive order that was framed as “temporary.” Trump also ordered a review of permits, but the industry had hoped projects under construction would be allowed to move forward.
7. European Central Bank leaves rates unchanged as tariff fallout lingers
The European Central Bank held interest rates steady on Thursday as economic uncertainty persists in the wake of U.S. Donald Trump’s aggressive tariff agenda. Ahead of the decision, markets had been pricing in an around 99% chance of the ECB’s key deposit facility rate being left at 2% for the second consecutive time. The central bank last cut rates in June, bringing rates further down from last year’s record high of 4%. “Inflation is currently at around the 2% medium-term target and the Governing Council’s assessment of the inflation outlook is broadly unchanged,” the ECB said in a statement. The central bank added that it would follow a meeting-by-meeting, data-dependent approach and was not pre-committing to a specific path for interest rates. The ECB offered little indication on the future direction for rates.
8. Trump’s pressure on Europe to slap 100% tariffs on India and China raises eyebrows
Reports that U.S. President Donald Trump asked the European Union to slap tariffs of up to 100% on China and India for their Russian oil purchases has raised eyebrows on both sides of the Atlantic, with Europe seen as unlikely to acquiesce to the White House’s request. The commission pointed to its 19th measures package its preparing against Moscow, saying it had “added new sanctions tools which allow us to target circumvention through third countries” and that the U.S. was a “crucially important partner” in Brussels’ efforts to pile pressure on Russia’s war economy. Asking the EU to impose tariffs on key Russian energy clients India and China was seen as another way to punish their trade with Moscow and put pressure on Russia to end the war in Ukraine. Yet European officials appear wary of alienating China and India, and the timing of Trump’s request has raised eyebrows because it Washington is negotiating a trade deal with New Delhi.
9. Trump’s tariffs are slowly finding their way into consumer prices
From clothing to auto parts to electronics and more, tariffs are making everyday items cost more at a time when the labour market is looking increasingly fragile. A key Bureau of Labor Statistics inflation report released Thursday showed price increases for a variety of tariff-sensitive items. Apparel prices rose 0.5% as did video and audio products. Motor vehicle parts climbed 0.6% while new car prices were up 0.3% and energy increased 0.7%. Groceries accelerated 0.6%, the biggest monthly move since August 2022. Furniture and bedding saw a 0.3% hit and are up 4.7% from a year ago while tools and hardware had a 0.8% jump, part of manufacturing-related goods that are particularly impacted. Together, the increases may not sound dramatic. But they are enough to give both consumers and Federal Reserve policymakers at least some cause for concern.
10. U.S. will split profits with Tokyo from Japan-funded projects until $550 billion is recouped: Lutnick
Commerce Secretary Howard Lutnick said Thursday that the U.S. will equally share profits with Japan from projects funded by the Asian country through its tariff deal until the initial investment is recouped. Tokyo agreed to earmark $550 billion for investment in American-based projects selected by the U.S. government as part of a deal finalized last week. President Donald Trump said Japan will now face 15% baseline tariffs and some sector-specific levies under the two countries’ deal. Lutnick said the U.S. will initially split profits equally on projects funded through Japan’s investment. Once Japan earns back its $550 billion, the profit breakdown will shift to the U.S. receiving 90% and Tokyo taking the remaining 10%, Lutnick said. “After that, it’s 90/10, in favour of America,” Lutnick said Thursday. Lutnick said an investment committee will suggest projects to fund through Japan’s cash pile.
11. ‘Here we go’: Trump responds to Russia’s drone incursion on a NATO ally.
Russia’s drone incursion into Poland now poses an acid test for NATO and the European Union. In a first such instance since Russia’s full-scale invasion of Ukraine, Warsaw said it scrambled its own and NATO aircraft to take down some of the 19 Russian drones that entered its airspace in the early hours of Wednesday morning. Russia’s Defence Ministry on Wednesday said it did not plan to attack any targets in Poland, while Warsaw’s Western allies swiftly condemned what they described as a deliberate and unprecedented provocation. Italian Foreign Minister Antonio Tajani said new economic measures against Moscow may be required to try to force Russian President Vladimir Putin to negotiate an end to the conflict.
12. Alibaba, Baidu begin using own chips to train AI models
China’s Alibaba and Baidu have started using internally designed chips to train their AI models, partly replacing those made by Nvidia, The Information reported on Thursday, citing four people with direct knowledge of the matter. Alibaba has been using its own chips for smaller AI models since early this year, while Baidu is experimenting with training new versions of its Ernie AI model using its Kunlun P800 chip, the report said. Alibaba and Baidu did not immediately respond to Reuters requests for comment. The move is a significant shift in China’s tech and AI landscape — where companies largely rely on Nvidia’s powerful processors for AI development — and would further dent Nvidia’s China business. “The competition has undeniably arrived … We’ll continue to work to earn the trust and support of mainstream developers everywhere,” an Nvidia spokesperson said in response to the report.
13. Micron stock rises as Citi boosts price target ahead of earnings
Micron Technology stock rose 3.6% in pre-market trading on Thursday after Citi raised price target on the memory chip maker to $175 from $150 while maintaining a Buy rating. The new target suggests 25% upside potential and comes ahead of Micron’s fiscal fourth quarter earnings report scheduled for September 23. Analysts expect Micron to report in-line results but guide well above consensus for the first quarter, driven by higher DRAM and NAND sales and pricing. The positive outlook comes as demand from the artificial intelligence sector has reportedly increased sharply. Morgan Stanley also highlighted NAND’s growing importance in AI applications, estimating that the AI NAND market will account for 34% of the global NAND market by 2029, adding an incremental $29 billion to the total addressable market.
14. OpenAI, Nvidia set to announce UK data centre investments
The CEOs of the ChatGPT maker OpenAI and Nvidia plan to pledge support for billions of dollars in UK data centre investments when they head to the country next week at the same time as U.S. President Donald Trump, on Thursday. The companies are teaming up with London-based data centre business Nscale Global Holdings on the project, the report said, citing people with knowledge of the matter. Nvidia declined to comment. OpenAI, NScale Global, the White House and Downing Street did not respond to Reuters requests for comment outside regular working hours. The investment underscores rising demand for digital infrastructure, driven by artificial intelligence and cloud computing. OpenAI CEO Sam Altman and Nvidia’s chief Jensen Huang are among a group of U.S. tech executives expected to visit the country as part of the delegation, as per the report. Several U.S.-based companies across a range of industries are also expected to announce tens of billions of dollars in UK investments during Trump’s visit.