Traders walk the floor during morning trading at the New York Stock Exchange (NYSE) on May 14, 2024 in New York City.
Spencer Platt | Getty Images
This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.
What you need to know today
Waiting game
The S&P 500 was little changed as traders awaited a key U.S. economic report. The index ticked down 0.02%, after hitting an intraday high, and the Nasdaq Composite slipped 0.09%. The Dow Jones Industrial Average rose 78 points. Nvidia dropped 1.1% after hitting a record high on Wednesday. The yield on the 10-year Treasury was flat ahead of Friday’s nonfarm payrolls report as investors look for any signs of weakness in the labor market that could justify Fed rate cuts. U.S. oil prices jumped 2% as the European Central Bank cut rates.
Roaring Kitty live
Shares of GameStop popped nearly 50% after Keith Gill, also known online as Roaring Kitty, announced plans to go live on YouTube for the first time in almost four years. Investors speculated the discussion would center on his massive bet on the brick-and-mortar video game retailer.
Big Tech antitrust probe
The Federal Trade Commission and the Justice Department are initiating antitrust investigations into Microsoft, OpenAI and Nvidia to examine their influence on the AI industry, a source told CNBC. The FTC will investigate Microsoft and OpenAI, while the DOJ will focus on Nvidia. The probes will scrutinize the companies’ conduct rather than mergers. The move comes a day after former and present employees of OpenAI raised concerns about the rapid rise of AI and the lack of oversight.
Robinhood’s crypto bet
Trading platform Robinhood Markets agreed to buy crypto exchange Bitstamp for about $200 million in cash as it expands internationally. Bitstamp has 50 active licenses and registrations globally, putting Robinhood in direct competition with Binance and Coinbase. Last month, Robinhood said cryptocurrency transactions accounted for $126 million in revenue in the first quarter and warned it could face regulatory scrutiny over its crypto business.
China, HK slip after trade data
Hong Kong’s Hang Seng reversed early gains, sliding 0.43%, and mainland China’s CSI 300 index fell 0.72% after China’s exports surged in May but imports missed expectations, raising concerns about domestic demand in the world’s second-biggest economy. South Korea’s Kospi rose 0.94% after investors returned from Thursday’s public holiday. Australia’s S&P/ASX 200 was also trading higher, while Japan’s Nikkei 225 dipped 0.2%.
[PRO] Beyond Nvidia
Chipmaker Nvidia, which briefly topped $3 trillion in market value, is clearly the poster child for artificial intelligence, according to one portfolio manager — but she says another firm is being overlooked. The company’s CEO expects to make $10 billion in AI-related chips this year.
The bottom line
Carsten Brzeski, chief economist at ING Germany, shared his main takeaway from the ECB meeting on X, accompanied by an image of Star Trek’s Data. His next post was even more withering: “Show me a central bank that doesn’t need data for its decisions.”
ECB President Christine Lagarde, during the press conference following the central bank’s widely telegraphed interest rate cut, said future decisions would be “data-dependent” and decided “meeting by meeting” based on inflation, underlying inflation and how effective monetary policy has been.
There had been one dissenter to the rate cut. Austrian central bank governor Robert Holzmann, who told the Financial Times: “Data-based decisions should be data-based decisions.” The noted hawk confirmed the comment when contacted by CNBC.
May’s eurozone inflation accelerated to 2.6% from April’s 2.4%, according to Eurostat. The ECB also raised its inflation forecasts for the coming years.
“Apparently, the forecasts previously debunked and questioned by the ECB itself have suddenly become powerful and influential again,” wrote Brzeski on ING’s website. “There’s nothing wrong with that, and the rate cut decision also marks an attempt to become a real forward-looking central bank again.”
But he also cautioned there was a risk of “reverse Trichet moment.”
In 2008, former ECB President Jean-Claude Trichet hiked rates “shortly before the US subprime crisis became a global financial crisis. A mistake. And in 2011, the ECB under Trichet hiked interest rates, assuming the euro crisis was over. Also a mistake,” Brzeski wrote.
“Six months later, new ECB President Mario Draghi came into office and cut interest rates as the eurozone economy was stuck in recession. These fears of a ‘reverse Trichet moment’ have not disappeared after today’s meeting.”
And that’s the rub. The ECB was late in pulling the trigger on raising rates, lagging behind the Federal Reserve, but has stepped in front by lowering them. Fed officials maintain that they want to see clear evidence over the coming months that inflation is easing before they consider lowering rates.
They’ll have more data today to assess the state of the labor market. Investors would like to see weakness to give the Fed more room to cut rates. CNBC’s Jeff Cox has more analysis on what to expect.
— CNBC’s Jenni Reid, Brian Evans, Samantha Subin, Jeff Cox, Yun Li, Tanya Macheel, Hayden Field, Eamon Javers, Amala Balakrishner, Evelyn Cheng and Lim Hui Jie contributed to this report.