Shares in Nvidia (NVDA) slid 5% in Wednesday's session after a report suggested Chinese environmental rules could impact the AI giant's sales in China, with tech stocks also selling off more broadly amid concerns of an escalating trade war.
The Financial Times reported Chinese regulators are encouraging firms to use data centre chips that meet strict environmental requirements. The guidelines exclude Nvidia's H20 chip, although its processor is compatible with US export controls for the Chinese market.
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In response to the report, an Nvidia spokesperson said: "Our products provide superb energy efficiency and value in every market we serve. As technology moves rapidly, export control policy should be adjusted to allow US firms to offer the most energy efficient products possible, while still achieving the Administration's national security goals."
Derren Nathan, head of equity research at Hargreaves Lansdown (HL.L), said: "Nvidia’s right up there when it comes to power efficiency and has navigated export restrictions to China with aplomb. China’s also a smaller part of the revenue mix than it was so there’s reason to hope that the current share price weakness will prove to be a blip rather than a trend."
NasdaqGS - Delayed Quote • USD At close: March 26 at 4:00:00 PM EDT
Auto stocks were down across the board on Thursday morning, with US carmaker General Motors (GM) down 6.5% in pre-market trading, following president Donald Trump's announcement of 25% tariffs on cars and some auto parts.
Trump said that the tariffs, which are set to come into effect on 2 April, would "continue to spur growth that you’ve never seen before".
Ford (F) shares were down 3% in pre-market trading, while in Europe shares Mercedes-Benz Group (MBG.DE) fell 3% on Thursday morning and Volkswagen (VOW3.DE) dipped 1.5%.
Tesla (TSLA) CEO Elon Musk, who is a close adviser to Trump, said in a post on X that the tariff impact on his electric vehicle company was "still significant". Shares in Tesla (TSLA) fell nearly 6% on Thursday amid broader market volatility and were up less than 1% in pre-market on Thursday morning.
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Lindsay James, investment strategist at Quilter, said: "With the clear objective of the US being to incentivise companies to move manufacturing to American soil, this will create enormous disruption for the years that it would take in practise to do. With enormous up front cost in addition to accepting what could be higher ongoing operating costs and a lengthy lead time to making the switch, a company could only consider this if there was clear certainty that the policy would be permanent, rather than lasting only the term of the president."
"Whilst tax incentives have been suggested, nothing has yet passed Congress," she said. "Whether companies have that conviction will be down to their individual appraisals, but in the short term, there will little protection from a move that will have enormous collateral damage."
NYSE - Delayed Quote • USD At close: March 26 at 4:00:02 PM EDT
Trading platform Robinhood (HOOD) revealed on Wednesday that it is launching wealth management and private banking services.
The company said its "Robinhood Strategies" wealth management service was now available to its Robinhood Gold members and would begin rolling out to all customers in April.
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Meanwhile, its "Robinhood Banking" platform would be launching later this year, offering private banking services to its Robinhood Gold members.
In addition, the company said it would also be launching the "Robinhood Corex" artificial intelligence (AI) investment tool later this year.
Shares fell 7% in Wednesday's session but were up nearly 1.5% in pre-market trading on Thursday.
NasdaqGS - Delayed Quote • USD At close: March 26 at 4:00:02 PM EDT
Shares in H&M (HM-B.ST) were up less than 2% after the clothing company released its first quarter results.
H&M posted net sales of 55.3 billion Swedish krona (£4.3bn) for the first quarter, which was below the 55.8 billion krona expected by analysts, according to Bloomberg.
Meanwhile. operating profit of 1.2 billion Swedish krona also came in below analyst expectations of 1.9 billion krona.
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Russ Mould, investment director at AJ Bell (AJB.L), said: "It’s not a great start to the year but the Swedish retailer doesn’t seem too fussed. It says the first quarter is always the smallest contributor in terms of sales and margin, and that it’s seeing tentative signs of improvement."
"H&M has been closing stores and spending more money on its digital proposition, similar to many retailers globally. Physical shops are still important as shoppers like to touch and feel products before buying; yet transactions are increasingly made via mobile phones, laptops or tablets."
"Investors will be hoping H&M’s problems have peaked and it is on the path to greatness," he said. "Unfortunately, we’ve been in this situation many times before and H&M has a nasty habit of tripping up over and over again."
On the London market, shares in Next (NXT.L) surged 6.3% on Thursday morning, after the retailer reported £1bn ($1.3bn) annual profits for the first time.
Next said group sales were up 8% to £6.3bn for the year to January, while pre-tax profits had risen 10% to hit £1bn.
The retailer said full price sales for the first eight weeks of the year had come in ahead of expectations and upgraded its guidance for growth in the first half of the year to 6.5%, from 3.5% and now expected sales to be up 5% for the full year. Next also increased its pre-tax profit guidance for the year by £20m to £1.07bn and said it expected post-tax earnings per share to be 8.5% higher.
Next said that it continued to be optimistic about the company's prospects, "albeit in an environment where the risks to the wider UK economy are growing."
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"Next is the envy of the retail sector," said Mould. "Once again it has upgraded sales and profit guidance, leaving its rivals in the dust. Next is typically a cautious outfit, preferring to under-promise and over-deliver, which makes its latest optimism a surprise given the fragile market backdrop."
"Trump tariffs may have little direct impact on the business, yet a trade war still threatens to dampen consumer sentiment and that could send shockwaves across the retail sector and see Next swept up in any chaos," he said.
“For Next, being in a strong position means it is better placed than many rivals to cope with market turbulence," Mould added. "The weakest could fall to the wayside, while Next could gain market share. The key is avoiding a big slump in profits and a lot of that is out of the company’s control given external forces at work."
Nio (NIO)
Stellantis (STLA)
Playtech (PTEC.L)
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Walgreens Boots Alliance (WBA)
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