Asian shares track Wall Street futures lower as Nvidia's results disappoint

Asian shares followed Wall Street futures lower on Thursday as Nvidia's results disappointed some bullish investors, while the dollar steadied and the Treasury yield curve came within a whisker of turning positive.

Investors now await US weekly jobless claims, which have gained prominence given the Federal Reserve's focus on the health of the labour market, as well as inflation readings from Germany and Spain, for clues on rate-cut prospects beyond September.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.6 per cent as tech stocks dragged. The Nikkei eased 0.4 per cent while South Korea dropped 0.7 per cent.

Nvidia's third-quarter revenue forecast of $32.5 billion surpassed Wall Street estimates, but the results still failed to impress the most bullish investors, who have driven a dizzying rally in its shares.

Shares of the AI darling slumped 7.6 per cent in after-hour trading, losing about $236 billion of its market value.

As a result, Nasdaq futures dropped 1 per cent early in Asia, while S&P futures skidded 0.5 per cent.

Nvidia's chip contractor TSMC slid 2.4 per cent when shares opened, dragging the broader Taiwanese market 1.3 per cent down.

"Nvidia, in some ways, has become a victim of its success, its share price soaring over 180 per cent this year and after beating earnings now in 14 of the past 15 quarters," said Tony Sycamore, analyst at IG.

"Whether today's results signal the end of investors' strong affinity for the chipmaker remains to be seen. However, at the very least, the post earnings reaction does suggest it's an excellent time to consider diversifying from Nvidia into other chipmakers."

China's blue chips fell 0.4 per cent for a fourth straight day as disappointing results from Chinese companies highlighted the country's frail economic recovery. UBS on Wednesday cut its 2024 GDP growth forecast for China to 4.6 per cent from 4.9 per cent.

Chinese battery maker CATL fell 2 per cent after two top Republican lawmakers sought to have the firm to be added to a restricted list of companies allegedly working with Beijing's military.

US National Security Adviser Jake Sullivan is wrapping up three days of talks in Beijing intended to ease simmering tensions between the two superpowers.

Chinese food delivery giant Meituan jumped 7 per cent after posting a bigger-than-expected 21 per cent rise in second-quarter revenue.

Debt and currency markets were mostly steady in the Asia session. Fed Atlanta President Raphael Bostic said on Wednesday it may be "time to move" on rate cuts, but he wanted to see confirmation from the jobs reports and two inflation reports before the September meeting.

The dollar steadied above more than one-year lows, undermined by expectations of imminent Fed rate cuts. Futures have fully priced in a quarter-point cut next month, and even imply a 35 per cent probability of a half-point easing.

The euro held at $1.113, having dropped 0.6 per cent overnight and failed to break major resistance at $1.12.

Treasury yields were mixed overnight, but the inverted yield curve between two years and 10 years kept steepening to just within a whisker of turning positive. That would be the first time since July 2022, barring the brief un-inverting during the market crash earlier this month.

Two-year yields held at 3.8692 per cent, having slipped 4 basis points overnight, while 10-year yields were little changed at 3.8368 per cent, just 3 basis points below the two years.

Gold climbed again and was just shy of scaling another peak. Gold prices were up 0.4 per cent at $2,512.89 an ounce, just a touch below its record of $2,531.6.

Oil edged higher after two straight sessions of declines as concerns about demand from China and the US countered supply disruptions out of Libya. [O/R]

Brent crude futures rose 0.1 per cent to $78.75 a barrel, having fallen more than 3 per cent in the past two days, while US West Texas Intermediate crude futures gained 0.2 per cent to $74.69.