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The Scissor Drawer Is Open

Market Update

01.09.2025

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What happened last week?

US

  • Nvidia announced strong results – but investors expected as much, so they didn’t move the stock much.
  • The US president relived his Apprentice days, throwing a “you’re fired” at a Fed governor.

Asia

  • China announced plans to triple its chip capacity by the end of next year.

Why It Matters

Nvidia made $46 billion in revenue last quarter, 56% more than the same time last year. (The data centre division made up 88% of those takings.) What’s more, the world’s biggest company expects to make $54 billion this quarter. Investors and analysts expected as much, so they barely flinched on the news. Though, even without a push, the stock’s sitting near its record highs.

The US president conflicts with another Fed member, accusing the central bank official of fudging mortgage documents back in 2021. He called that cause for removal on social media late Monday.

The official responded by filing a lawsuit, calling the attempted dismissal illegal. This is uncharted territory – no Fed governor has ever been fired – and brings the Fed’s independence into question.

Determined to compete with the US, China wants to triple its output of AI chips. It will finance new plants, designed specifically to support chipmakers, including Huawei. That could bolster the tech industry as a whole, which has been held back by bans covering Nvidia’s top processors. The more self-sufficient China becomes, the less bargaining power America has.

The Focus This Week: The Scissor Drawer Is Open

The Fed recently said it’s more concerned about the labour market than inflation – suggesting that an interest rate cut could be coming. So investors will pore over Friday’s jobs data: a weak number on Friday would likely cement a quarter-point cut in September. A negative number could even lead to a half-point cut. The current prediction is that 78,000 jobs will have been created in August – and it would likely take a figure closer to 250,000 to take a trim off the table.

The Fed’s first interest rate cut probably won’t be its last. Right now, traders expect two rate cuts this year, and at least three more next year. But with the US president pushing for even bigger cuts, and a new central bank chair starting next May, those forecasts are far from set in stone.

The Week Ahead

  • Monday: Eurozone unemployment (July). US markets closed (Labor Day).
  • Tuesday: US ISM manufacturing (August), China services PMI (August).
  • Wednesday: Eurozone PPI (July). Earnings: Salesforce.
  • Thursday: Eurozone retail sales (July), US ISM services (August), Japan household spending (July). Earnings: Nio, Broadcom, Lululemon.
  • Friday: UK retail sales (July), US payrolls (August).

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