News in Brief Global Markets Watch: Bank Earnings, US Inflation, and Nvidia’s China Rebound

Wall Street prepares for crucial bank results, CPI data, and easing chip restrictions that could reshape investor sentiment

Markets Hold Steady Ahead of Key Announcements

US stock futures edged slightly higher on Tuesday as investors brace for a packed day featuring major bank earnings, inflation data, and updates on China’s economic resilience. The markets remain cautiously optimistic despite ongoing trade tensions and geopolitical risks.

• Dow futures held steady
• S&P 500 futures rose by 0.3%
• Nasdaq 100 futures gained 0.4%

Markets were lifted by AI-related headlines, including news that Meta (Facebook) plans to invest heavily in AI infrastructure, and President Trump is preparing a $70 billion package for AI and energy.

US Banks to Kick Off Earnings Season

Major US banks including JPMorgan Chase, Citigroup, Wells Fargo, and BlackRock are set to report results. Analysts expect improved returns driven by:

• Robust trading activity
• Steady investment banking
• Modest growth in net interest income (NII)

Wall Street views these banks as economic bellwethers, with their earnings providing insight into broader business conditions amid global uncertainty.

Inflation in Focus: CPI Set to Rise

The US Consumer Price Index (CPI) is forecast to climb:

• 2.6% annually (up from 2.4% in May)
• 0.3% month-on-month

Core CPI, which excludes volatile items like food and energy, is expected at:

• 3.0% year-on-year
• 0.3% month-on-month

While markets remain relatively calm about Trump’s tariff threats, analysts warn that price data could soon reflect the impact of accelerated ordering and supply chain adjustments ahead of new levies.

China’s Economy Holds Firm Despite Trade Tensions

China’s GDP grew by 5.2% year-on-year in Q2, slightly ahead of expectations, keeping the country on track to meet its 5% growth target for 2025.

• Quarter-on-quarter growth: 1.1%
• Six-month GDP: 5.3%

Despite Trump's tariffs, China’s exports remained resilient in May and June. A mid-May truce between the US and China has helped to stabilise trade flows, although weak domestic demand and a sluggish property market remain key risks.

Nvidia Set to Resume Chip Sales in China

In a major development, Nvidia announced it will soon restart sales of its H20 AI chip in China following easing US export restrictions.

• A new GPU tailored for smart factories and logistics was also unveiled
• Nvidia shares rose 3.6% in after-hours trading

The US Commerce Department is expected to approve licences for renewed sales, part of a broader effort to ease tech restrictions following improved US-China dialogue. This could bolster Nvidia’s dominance in global AI hardware, especially in Asia.

Investment Takeaways

 Banking stocks may offer upside if earnings surpass expectations
 US inflation data will guide Fed rate expectations and bond markets
 Nvidia and AI-linked shares are poised to benefit from relaxed chip export rules
 China-exposed investments may regain favour if growth remains stable
 Tariff risks remain a wildcard for multinational firms

Sources : (Investing.com, Reuters.com)