China International Supply Chain Expo kicks off in Beijing amid US tariff tensions
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CNA
6 minutes ago
- CNA
Microsoft and Meta fuel $500-billion gain in AI stocks
Wall Street's AI heavyweights added a combined half a trillion dollars in stock market value late on Wednesday after quarterly reports from Microsoft and Meta Platforms showed massive investments in the emerging technology were paying off. In extended trade, Microsoft jumped 8 per cent and Meta surged 9 per cent, with the two Magnificent Seven companies increasing their market values by $288 billion and $152 billion, respectively. Dominant AI chipmaker Nvidia, the world's most valuable company, climbed 1 per cent, while Amazon, which reports its results on Thursday, added over 2 per cent. Shares of the U.S. stock market's most valuable companies have surged in recent years as they race to dominate artificial intelligence, and their massive investments have left investors eager to see results. Fueling the late-day enthusiasm for AI-related stocks, Meta forecast quarterly revenue well ahead of Wall Street expectations and raised the lower end of its annual capital expenditures forecast by $2 billion, driven by its high-stakes push for "superintelligence" in the heated AI race. Microsoft also delivered a blowout quarterly report, with its Azure cloud-computing business powering revenue above Wall Street's expectations and showcasing the growing returns on its AI bets.
CNA
35 minutes ago
- CNA
BOJ to be cautiously upbeat, keep rates steady as trade gloom lifts
TOKYO :The Bank of Japan is set to keep interest rates steady on Thursday and offer a cautiously optimistic view on the economic outlook, after Tokyo's trade deal with Washington cleared some uncertainty surrounding its fragile recovery. Markets are focusing on any hints Governor Kazuo Ueda may offer on the likelihood of another rate hike this year, as the central bank weighs lingering tariff-induced risks to growth and mounting inflationary pressure from higher food costs. "Given the high degree of uncertainty, I understand a wait and see stance is necessary for now," former BOJ Deputy Governor Hiroshi Nakaso told Reuters, warning U.S. tariffs and slowing global demand will weigh on Japan's economy. "But once the uncertainties clear enough for the BOJ to restore confidence that the economic and inflation trajectory will move in line with their projections, I think they will be back on their way to the next rate hike," he said. At the two-day meeting ending on Thursday, the BOJ is widely expected to keep short-term interest rates steady at 0.5 per cent. In a quarterly report, the BOJ is likely to revise up this fiscal year's inflation forecast but maintain its view that underlying inflation - or price moves driven by domestic demand - remains short of its 2 per cent target, sources have told Reuters. The BOJ may offer a less gloomy view on the economy compared with the current one focused on tariff-induced risks, but likely to warn of lingering uncertainty on how the higher U.S. levy affects business activity, separate sources said. "A weak real economy, a lack of demand-driven price pressure and lingering trade uncertainty will keep the central bank on hold," said Stefan Angrick, head of Japan and Frontier markets Economics at Moody's Analytics. "Our best guess is that the central bank will next hike rates in January, though a hike may come as early as December 2025," he said. A Reuters poll, taken before the Japan-U.S. trade deal announcement earlier this month, showed a majority of economists expect the BOJ to raise rates again by year-end. Japan's trade deal struck with President Donald Trump this month lowers U.S. tariffs for imports of goods including its mainstay automobiles, easing the pain for the export-reliant economy and clearing a key hurdle for further BOJ rate hikes. The positive development contrasts with the gloom that surrounded the economy on May 1, when the BOJ produced its current estimates amid heightened market volatility caused by Trump's April announcement of sweeping "reciprocal" tariffs. But the BOJ has not let its guard down yet. Deputy Governor Shinichi Uchida warned earlier this month that it was still hard to tell how much damage U.S. tariffs and slowing global trade could inflict on Japan's economy. The International Monetary Fund on Tuesday edged up its global growth forecast on front-loading demand from firms seeking to beat tariffs, but warned of major risks to the outlook including a potential rebound in tariffs. The key would be whether Japan's big manufacturers, which have been key drivers of wage hikes, will continue to increase pay as their profits get squeezed by U.S. tariffs, analysts say. The BOJ exited a decade-long, massive stimulus last year and raised its short-term policy rate to 0.5 per cent in January on the view Japan was progressing towards durably achieving its price goal. While Governor Ueda has signaled a pause in rate hikes after Trump's April 2 announcement of "reciprocal" tariffs, Japan's trade deal with the U.S. has revived market expectations of an increase in its short-term policy rate to 0.75 per cent by year-end. Some hawkish BOJ board members have stressed the need to pay more attention to upside risks to prices with stubbornly high food costs keeping core inflation above the bank's 2 per cent target for well over three years. In current projections made on May 1, the BOJ projects core consumer inflation to hit 2.2 per cent in fiscal 2025, before slowing to 1.7 per cent in 2026 and 1.9 per cent in 2027.
CNA
an hour ago
- CNA
Arm to develop own chips; stock falls as outlook disappoints
Chip architecture provider Arm Holdings is investing in developing its own chips, CEO Rene Haas said on Wednesday, marking a major shift to its model of licensing its blueprints to other companies. Arm also issued quarterly forecasts that failed to satisfy investors who have sent the company's stock surging in recent months on expectations it will become a key player in artificial intelligence. Arm shares slumped around 8 per cent in extended trading on Wednesday. The plan to invest more heavily in developing its own chips marks a departure from Arm's long-time business of supplying intellectual property to companies ranging from Nvidia to which already design their own chips. Finished chips are the "physical embodiment" of a product Arm already sells called Compute Sub Systems (CSS), Haas said. "We are consciously deciding to invest more heavily — is the possibility of going beyond (designs) and building something, building chiplets or even possible solutions," Haas said in an interview with Reuters. Chiplets are smaller, modular versions of a larger chip. Chiplets perform specific functions, and designers will stitch several together to form a complete processor. To build up the necessary staff to make chiplets and other finished chips, Arm has been recruiting from its customers and competing against them for deals, Reuters has reported. Haas declined to provide a timeframe in which the company's investments in the new strategy would translate into profit, or give specifics about potential new products that are part of the initiative. But, Haas said that Arm would look at chiplets, "a physical chip, a board, a system, all of the above." In recent months, chip companies have begun to focus more effort on building the necessary server hardware, or server rack, around a chip. Nvidia sells its NV72 rack systems, and Advanced Micro Devices acquired server builder ZT Systems to build system-level products. This expansion of its business could put Arm in competition with some of its customers, who design finished chips and chiplets for their own products. The company forecast second-quarter profit slightly below estimates on Wednesday, as global trade tensions threaten to hit demand for Arm in its mainstay smartphone market. The company's chip technology powers nearly every smartphone in the world, and its tame forecast underscores uncertainty faced by global manufacturers and their suppliers resulting from U.S. President Donald Trump's tariff policies. UK-based Arm forecast adjusted per-share profit between 29 cents and 37 cents for the fiscal second quarter, the midpoint of which is below analysts' average estimate of 36 cents per share, according to LSEG data. The company generates revenue through licensing deals for its intellectual property and a royalty charged for each chip sold that uses its technology. Smartphones remain Arm's biggest stronghold. Morningstar analysts expect Arm to continue as the dominant architecture provider in smartphone processors, where it has a 99 per cent market share. Global trade tensions, however, cloud the outlook for the market. Uncertainty fueled by tariff volatility and ongoing macroeconomic challenges has tapered end-market demand, with global smartphone shipments increasing just 1 per cent in the April-to-June period, according to International Data Corporation. The company expects current-quarter revenue between $1.01 billion and $1.11 billion, in line with estimates of $1.06 billion. The company reported first-quarter sales of $1.05 billion, coming in just shy of estimates of $1.06 billion. Adjusted profit of 35 cents per share was in line with estimates.
