Stocks Rise on Nvidia Breakthrough Ahead of CPI: Markets Wrap

by Andre Janse van Vuuren and Julien Ponthus 

Stocks advanced after Nvidia Corp. secured US assurances to resume sales of some artificial intelligence chips to China, lifting sentiment on a busy day that also features inflation data and big bank earnings. 

European stocks rose 0.3%, with technology shares among the session’s top performers. Futures for the Nasdaq 100 gained 0.6% while those for the S&P 500 climbed 0.4%. Nvidia strengthened more than 5% in early trading. Bitcoin fell as traders took profit after a record-setting surge.  

The yield on 10-year Treasuries declined two basis points to 4.41%, with government bonds rising broadly in positioning-led moves ahead of June’s consumer price index report. The dollar dropped 0.2%. 

The approval of export licenses for the H20 chip not only boosts Nvidia’s earnings prospects but also bodes well for progress in trade talks between the White House and key partners. With stocks trading near record highs, investors will gain a clearer read on corporate health as JPMorgan Chase & Co. and other major banks mark the unofficial start of earnings season. 

“The US policy reversal on selling AI chips to China clearly constitutes good news for the industry,” said David Kruk, head of trading at La Financiere de L’Echiquier. “Other than that, the upward trend is still being fueled by investors riding the TACO trade — there are threats but they have yet to materialize.” 

After months of seeing little inflation, CPI probably experienced slightly faster growth in June as companies started to pass along higher costs of imported merchandise associated with tariffs. The options market is betting the S&P 500 will swing 0.6% in either direction after the release, based on the cost of at-the-money puts and calls, according to Citigroup Inc. 

It’s still too early to gauge the impact of the Trump administration’s tariff agenda on inflation, said Arend Kapteyn, UBS Group AG’s global head of economic and strategy research. He noted that July’s data, set to be released next month, would likely provide the earliest indication of any clear effect. 

The lag is helping to underpin the Federal Reserve’s wait-and-see approach to cutting interest rates, with swaps pricing in less than two quarter-points of monetary easing this year. 

“We’re about to go into a five- to six-month period of accelerating inflation,” Kapteyn told Bloomberg TV. “It’s a trade-off between when does the labor market starts to ease, starts to crack — and we’re already seeing some signs of that — versus how quickly is the inflation data increasing.” 

Meanwhile, a survey by Bank of America Corp. showed that fund managers are rushing back into risky assets at a record pace, fueled by optimism over economic growth and strong corporate profits.  

The risk level in investor portfolios is the highest ever on a three-month basis going back to 2001, the bank’s survey showed. The poll also pointed to strong increases in allocations to US and European stocks, as well as tech shares. 

For Mohit Kumar, chief European strategist at Jefferies International, investor positioning is likely to be less supportive for stocks going forward, as there is now less cash sitting on the sidelines compared to the past two months. 

“We are still far from levels where we would advocate a short, but given valuation and positioning, it makes sense to take some chips off the table,” he said. 

Corporate Highlights: 

• The European Union has finalized a second list of countermeasures to target US goods worth €72 billion ($84 billion), including Boeing Co. aircraft, automobiles and bourbon if it decides to retaliate against Donald Trump’s tariff policy. 
• Thames Water raised doubts over the likelihood of a successful overhaul of its finances, saying temporary nationalization may be in the cards. 
• Rio Tinto Group has named its iron ore boss Simon Trott as its new chief executive officer, replacing the outgoing Jakob Stausholm. 
• Ericsson AB’s profit beat analysts’ expectations after US sales growth boosted the market for 5G telecom equipment in the second quarter. 
• Sumitomo Mitsui Financial Group Inc. is considering making an additional $1.1 billion investment in Indian lender Yes Bank Ltd., people familiar with the matter said. 

Some of the main moves in markets: 

Stocks 

• S&P 500 futures rose 0.4% as of 6:13 a.m. New York time 
• Nasdaq 100 futures rose 0.6% 
• Futures on the Dow Jones Industrial Average were little changed 
• The Stoxx Europe 600 rose 0.3% 
• The MSCI World Index was little changed 

Currencies 

• The Bloomberg Dollar Spot Index fell 0.2% 
• The euro rose 0.2% to $1.1684 
• The British pound rose 0.2% to $1.3456 
• The Japanese yen was unchanged at 147.72 per dollar 

Cryptocurrencies 

• Bitcoin fell 2.8% to $116,789.76 
• Ether fell 1% to $2,973.92 

Bonds 

• The yield on 10-year Treasuries declined two basis points to 4.42% 
• Germany’s 10-year yield declined five basis points to 2.68% 
• Britain’s 10-year yield declined two basis points to 4.58% 

Commodities 

• West Texas Intermediate crude fell 0.6% to $66.59 a barrel 
• Spot gold rose 0.6% to $3,364.55 an ounce 

This story was produced with the assistance of Bloomberg Automation. 

© 2025 Bloomberg L.P.