French political turmoil drags European shares lower

General market commentary

US equities advanced on Tuesday as traders looked past President Donald Trump’s move to remove Federal Reserve Governor Lisa Cook, instead turning their attention to Nvidia’s forthcoming earnings. The S&P 500 and Nasdaq each rose 0.4%, while the Dow Jones gained 0.3%, with industrials leading and consumer staples underperforming. Nvidia shares climbed ahead of its results, while Eli Lilly surged after reporting encouraging late-stage trial data for its weight-loss pill. AT&T slipped following its $23 billion spectrum deal with EchoStar, though the latter jumped sharply. The Russell 2000 outperformed, adding to signs that market leadership is beginning to broaden beyond the mega-cap names.

Market participants also weighed the potential implications of Trump’s attempt to reshape the Federal Reserve board, with legal challenges likely to delay any immediate impact but leaving some uncertainty around future policy direction. Stronger-than-expected business investment, reflected in durable goods orders, helped underpin sentiment, even as housing and consumer confidence data showed ongoing weakness. With Nvidia now the largest weight in the S&P 500, investors are positioning ahead of its results, which could set the tone for the broader market given elevated expectations around artificial intelligence spending.

Latest market and economic update

Asian equities traded mixed this morning as investors awaited Nvidia’s earnings, with Chinese chip shares outperforming on strong local demand and profit gains. The CSI 300 and Hang Seng rose, while Japan and South Korea saw muted moves. Australia’s ASX 200 was flat, with mining gains offset by sharp retail losses and hotter-than-expected inflation data.

US equity futures inched higher on Wednesday as attention turned to Nvidia’s earnings, expected to be a key market driver. After-hours trading saw strong gains in MongoDB and Okta on upbeat AI-driven results, while Cracker Barrel rallied after reversing its logo change. Tuesday’s session closed higher across major indices, led by industrials, financials and health care.

European equities fell sharply yesterday, with the Stoxx 50 down 1.1%, led by a 1.6% decline in France’s CAC 40 as political turmoil deepened ahead of a September 8th confidence vote that threatens Prime Minister Bayrou’s government. Shares in French heavyweights such as LVMH and BNP Paribas weakened, while Commerzbank slumped over 6% on a downgrade by Bank of America.

The dollar index climbed above 98.3 on Wednesday, rebounding from earlier losses despite concerns over the Federal Reserve’s independence. Political pressure from President Trump’s attempt to remove Fed Governor Lisa Cook added uncertainty, yet markets still price an imminent rate cut. The euro weakened, with EUR/USD trading at 1.1629, reflecting renewed dollar strength.

Oil prices steadied in Asian trade today after sharp losses, with Brent at $67.16 and WTI at $63.17 per barrel. Markets weighed new U.S. tariffs doubling duties on Indian imports over Russian crude purchases and smaller-than-expected U.S. inventory draws. Traders now await official EIA data, with Ukraine tensions continuing to drive sentiment.

Equities on the move

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

Cybersecurity firm Okta raised its full-year revenue and profit forecasts, citing growing demand for identity verification tools amid rising AI-driven cyber threats. Shares jumped 6% in after-hours trading. In Q2, revenue rose 13% to $728 million and adjusted earnings per share exceeded estimates at 91 cents, with strong public sector deals, including the Department of Defence.

Eli Lilly’s experimental oral GLP-1 pill, orforglipron, helped overweight adults with type 2 diabetes lose 10.5% of body weight in a late-stage trial, with 75% reaching target A1C levels. Shares rose nearly 6%. The pill, easier to manufacture than injectables like Wegovy, also improved heart-risk markers and positions Lilly for potential regulatory filings next year.

UnitedHealth Group shares fell 1.4% as the U.S. Justice Department expanded its criminal probe to Optum Rx and doctor reimbursements. No wrongdoing has been alleged, but the insurer faces multiple civil and criminal investigations, including antitrust and Medicare billing inquiries, adding complexity for the nation’s largest health insurance provider.

Apple will host its annual fall launch on 9 September, unveiling the iPhone 17 range, including a thinner model and two Pro editions with redesigned backs and larger cameras, alongside upgraded Apple Watch models. The company has reportedly explored acquiring AI startups Mistral, valued at over $6 billion, and Perplexity, backed by Nvidia and Jeff Bezos, to accelerate AI development.

Spotify will roll out a messaging feature for both free and premium users, allowing chats and music sharing with contacts. Available this week on mobile for users aged 16 and over in select markets, the move aims to boost engagement and market share. The company, with 696 million monthly users, is also expanding video content and podcast monetisation.

Duolingo shares fell 1.7% after Google launched AI-powered Translate features, including live translation and customised language practice. Initially for English, Spanish, and French speakers, the tools offer interactive, skill-adaptive learning and real-time conversations in over 70 languages, increasing competition for Duolingo in the free AI-driven language education market.

Advanced Micro Devices received a Buy upgrade from Truist, which raised its price target to $213. Analysts cited improving industry sentiment around AMD’s data centre and AI positioning, noting hyperscale customers increasingly view AMD as a partner rather than a price check against Nvidia. EPS forecasts for 2027 were also lifted.

Bank of America reiterated its Buy rating on Expedia, citing modest global hotel room night share gains in 2025. Total nights rose 6.5% in H1, supported by the B2B segment, while VRBO’s growth challenges are narrowing. Strong advertising revenue and improving U.S. travel trends, alongside Hotels.com traffic recovery, underpin the positive outlook.

Upcoming data and events

Earnings season continues with Nvidia, Agilent, Snowflake and Crowdstrike reporting, offering insights across semiconductors, cloud computing and cybersecurity. Investors will also watch U.S. Department of Energy crude inventory data, which could influence energy markets and broader market sentiment.

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