US considers allowing Nvidia H200 sales to China

General market commentary

Shares in the United States recovered on Friday, with major indices posting solid gains that helped offset losses from earlier in the week. The Dow Jones Industrial Average climbed 1.08 % to 46,245.41, the S&P 500 rose 0.98 % to 6,602.99, and the tech-heavy Nasdaq Composite advanced 0.88 % to 22,273.08. Investors were encouraged by remarks from John Williams, President of the New York Fed, suggesting room for further interest rate adjustments in the near term. This raised hopes of a December rate cut, supporting equities and pushing Treasury yields lower. All sectors of the S&P 500 finished higher, led by communication services and health care. The gains followed a volatile November, driven by profit-taking in technology shares and concerns over valuations in AI-focused equities.

Despite Friday’s rebound, the week as a whole remained cautious. The S&P 500 and Dow each fell about 1.9 %, while the Nasdaq dropped around 2.7 %, weighed down by high valuations and Fed uncertainty. Delays in key economic data due to the recent government shutdown further complicated decision-making. Elevated volatility triggered rotations into underappreciated sectors such as health care, materials, and energy, while investors focused on managing risk. Friday’s gains offered temporary relief, but sentiment remains sensitive to technology earnings and Fed guidance on future interest rates.

Latest market and economic update

Asian shares mostly rose on Monday, recouping recent losses amid stronger expectations of a U.S. rate cut in December. Regional tech equities rebounded, though trading was muted by a Japan holiday. China lagged as chipmaker shares fell on reports Nvidia may regain approval to sell a more powerful AI chip in the country.

Wall Street futures rose on Sunday as renewed bets on a December Fed rate cut boosted sentiment, supporting a rebound from recent losses. S&P 500, Nasdaq 100, and Dow futures advanced, with investors eyeing key September economic data. Technology shares remained under pressure, though Nvidia gains and potential U.S. approval for China sales helped sentiment.

European shares closed mixed on Friday as concerns over elevated tech valuations weighed on sentiment despite strong Nvidia results. Germany’s DAX fell 0.8%, France’s CAC 40 was flat, and the broader tech sector saw sharp losses, with ASML down over 6% and other semiconductor firms also retreating, reflecting investor caution across equities.

The dollar remained steady on Monday, showing resilience against major currencies, particularly the euro, which traded at $1.1506. Market focus was on expectations of a U.S. rate cut in December, following comments from New York Fed President John Williams. Overall, the dollar index held around 100.25, with major currencies broadly contained near recent lows amid cautious trading.

Oil prices were steady in Asian trade this morning after weekly losses of about 3%, as markets balanced hopes for a potential Ukraine peace deal against new U.S. sanctions on Rosneft and Lukoil. Brent and WTI hovered near one-month lows, with peace-deal speculation pressuring prices while sanctions raised concerns over tighter supply.

U.S. Secretary of State Marco Rubio said talks in Geneva on a draft U.S. plan to end the war in Ukraine had made significant progress, describing the meeting as highly productive. Ukrainian officials, including President Zelenskiy’s Chief of Staff Andriy Yermak, praised the session and confirmed a second meeting would follow, involving European partners.

Treasury Secretary Scott Bessent said the 43-day US government shutdown caused an $11 billion permanent economic loss but expressed optimism for 2026, citing easing interest rates, tax cuts, and lower energy prices. He attributed inflation to the services sector, highlighted trade deals, and projected higher real incomes and plant openings, with substantial tax refunds early next year.

Equities on the move

The following companies experienced moves in their share price driven by analyst ratings, quarterly earnings, or other news:

The Trump administration is reportedly considering allowing sales of Nvidia’s H200 AI chips to China after a recent trade détente. The Commerce Department is reviewing export controls, though plans may change amid national security concerns. The move comes as Nvidia competes in China, while the US has previously limited AI chip exports over strategic risks.

BHP has abandoned a renewed attempt to buy Anglo American after initial talks, ending hopes of a deal that would have expanded its copper dominance. The withdrawal comes ahead of Anglo and Teck shareholder votes on a $60 billion merger. BHP, constrained by valuation discipline, will focus on organic growth, while Anglo continues its restructuring efforts.

Eli Lilly became the first drugmaker to reach a $1 trillion market value, driven by surging demand for its obesity and diabetes drugs, Mounjaro and Zepbound. Strong clinical efficacy, rapid scale-up, and rising global sales have propelled shares, while investors anticipate growth from the upcoming oral obesity drug orforglipron and supportive US production deals.

European defence shares fell to their lowest since early September on Friday, with an aerospace and defence index down 2.6%, after Ukrainian President Zelenskiy signalled willingness to discuss a U.S.-backed peace plan. Germany’s Renk, Hensoldt, and Rheinmetall led losses, while analysts view the selloff as a potential buying opportunity, anticipating higher European defence spending.

Alphabet is emerging as the market’s preferred AI leader, with investors increasingly confident Google has “already won the AI game,” according to Mizuho. Enthusiasm centres on Gemini 3, custom TPU chips, and strong growth across Search and core platforms. The market favours Google and its suppliers, while selling rivals like Microsoft, Amazon, and Meta.

Oppenheimer initiated coverage of IBM with an Outperform rating, setting a $360 price target, citing its shift toward software and AI as a driver of sustained revenue and margin growth. Strength in Automation, RedHat, and AI initiatives, alongside consulting recovery, is expected to boost gross and pre-tax margins, supporting a potential re-rating as the software pivot gains recognition.

JPMorgan upgraded Baidu to Overweight, lifting its price target to $188 as it sees AI and cloud becoming the company’s main growth engines. It highlighted rapid adoption of Baidu’s Kunlun chips, strong cloud-revenue momentum and soaring GPU-based subscriptions. While advertising is expected to keep declining, AI and cloud growth should outweigh competitive and macro risks.

Oppenheimer downgraded T-Mobile US to Perform, citing slower industry growth and rising competition that may pressure margins and limit market share. Subscriber growth is expected to slow, with rivals like Verizon and Comcast increasing promotions. Shares trade at a premium, and cable operators’ free wireless offerings raise exposure, challenging long-term subscriber additions.

Deutsche Bank resumed coverage of Carvana with a Buy rating and $395 target, citing its integrated operating model as a key advantage. Control over logistics, reconditioning, and technology allows reliable service and cost efficiency, supporting volume growth, margins, and Carvana’s market-leading e-commerce position.

Upcoming data and events

In a shortened Thanksgiving week, key US data releases will include September producer prices, retail sales, durable goods, housing prices, and regional surveys. The UK will publish its Autumn Budget, Germany, France, and Italy release November inflation and confidence indicators, while Canada, India, and New Zealand update GDP and policy rates.

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