Overnight US stocks | U.S. inflation has exceeded the Federal Reserve's 2% target for the 65th consecutive month, with the three major indices closing lower. NVIDIA Corporation (NVDA.US) initially saw its stock price drop after the earnings report, then it rebounded.

On Wednesday, all three major indices closed lower. U.S. inflation for July remains sticky, clearly above the Federal Reserve's 2% target for the 65th consecutive month. Data released by the U.S. Bureau of Economic Analysis on Wednesday shows that the Fed's preferred measure, the U.S. July PCE price index, has an annual rate of 3.7%, unchanged from June, while analysts had expected 3.6%. NVIDIA Corporation (NVDA.US) announced its latest earnings report after the close, with its share price briefly falling in after-hours trading, but the stock surged over 4% after the Chief Financial Officer indicated that revenue is expected to grow by about 70% in fiscal year 2028. As of the close, the Dow Jones Industrial Average fell 112.81 points, down 0.21%, to 53,464.59 points; the S&P 500 fell 1.46 points, down 0.02%, to 7,675.82 points; the Nasdaq Composite fell 21.10 points, down 0.08%, to 26,130.20 points. Tesla, Inc. (TSLA.US) fell 1%, Oracle Corporation (ORCL.US) rose 2.8%, NVIDIA Corporation (NVDA.US) dropped over 1%, and SK Hynix (SKHY.US) fell nearly 1%. The Nasdaq China Golden Dragon Index closed down 0.6%. European stocks saw the German DAX 30 index rise by 11.53 points, up 0.04%, to 26,296.59 points; the UK FTSE 100 index fell 7.12 points, down 0.07%, to 10,879.04 points; the French CAC 40 index rose 23.19 points, up 0.27%, to 8,462.39 points; the Euro Stoxx 50 index rose 15.42 points, up 0.24%, to 6,471.05 points; the Spanish IBEX 35 index rose 7.27 points, up 0.04%, to 20,063.87 points; the Italian FTSE MIB index rose 175.69 points, up 0.33%, to 52,896.00 points. In Asia, the Nikkei 225 index rose 0.62%, while the South Korean Kospi index rose 0.97%. The U.S. dollar index, which measures the dollar against six major currencies, rose 0.25% on the day, closing at 99.165. As of the end of trading in New York, 1 euro exchanged for 1.1651 dollars, down from 1.1674 dollars the previous trading day; 1 pound exchanged for 1.3592 dollars, down from 1.3646 dollars previously. 1 dollar exchanged for 159.40 yen, up from 159.22 yen previously; 1 dollar exchanged for 0.8055 Swiss francs, up from 0.8020 Swiss francs previously; 1 dollar exchanged for 1.3878 Canadian dollars, up from 1.3830 Canadian dollars previously; and 1 dollar exchanged for 9.5329 Swedish krona, up from 9.4659 Swedish krona previously. In cryptocurrencies, Bitcoin fell 0.57%, trading at $78,440; Ethereum rose 0.84%, trading at $2,475. In crude oil, light crude oil futures for October delivery on the New York Mercantile Exchange fell by 13 cents, closing at $82.23 per barrel, a decrease of 0.16%; London Brent crude oil futures for October delivery fell by 74 cents, closing at $87.84 per barrel, a decline of 0.84%. In precious metals, spot gold fell 1.39% to $4,594.12; spot silver was priced at $68.129. In macro news: The Fed's preferred inflation measure remains high, and the upcoming changes in statistical methods may lower the data. The Fed's preferred inflation measure indicates that price increases widened in July, remaining above the target range the Fed aims to maintain. The U.S. Department of Commerce reported that the PCE price index rose 0.2% month-on-month in July, compared to a decline of 0.1% in June. Excluding more volatile goods and energy categories, the core PCE price index also rose 0.2% month-on-month in July. The PCE data is usually in close alignment with market expectations as economists can use relevant components from the consumer price index (CPI) and producer price index (PPI) released earlier in the month to accurately predict PCE data. Some economists warn that certain components in the PPI might push last months core PCE data higher due to rising portfolio management service prices. The Bureau of Economic Analysis (BEA) is soon set to adopt new statistical methods for these components, with revisions expected to take effect next month, which may alleviate the upward pressure on core PCE. The White House plans to reach new drug pricing agreements with several biotech companies. Sources indicate that the Trump administration plans to announce a new round of "most favored nation" drug pricing agreements with several mid-sized biotech firms on Monday. These companies will agree to provide outpatient drug discounts to state Medicaid programs, aligning state payment prices with the prices these companies charge overseas, while states can decide whether to participate. In exchange, the companies will be exempt from participating in pilot projects that require Medicare to implement similar discounts, and some negotiations involve tariff reductions. It is currently unclear which pharmaceutical companies are involved and the actual scale of savings. Since last year, the Trump administration has reached similar agreements with 17 major drug companies, including Pfizer Inc. and Eli Lilly. Researchers estimate that if the relevant Medicaid pricing mechanisms cover 82 high-priced brand-name drugs, states could save over $8 billion annually. The U.S. second-quarter GDP growth rate remains at 1.5%, with stronger consumer and investment performance. The second quarter GDP growth rate has not been revised and is still estimated to be expanding at an annualized rate of 1.5%. However, the details show that consumer spending and business investment were stronger than initially reported. The BEA's second estimate released on Wednesday showed an annualized GDP growth rate, adjusted for inflation, of 1.5%, compared to the first quarter's growth of 2.1%. Consumer spending, which accounts for over two-thirds of economic activity, grew at an annualized rate of 3.4% in the second quarter, higher than the initially estimated 3.2%. Non-residential fixed investment grew at an annualized rate of 8.5%. A narrower measure of potential demandthe final sales to private domestic purchaserswas revised to show a growth of 4.2% in the second quarter, the strongest increase in over three years, up from the initially estimated 3.9%. This measure excludes net exports, inventories, and government spending. In the second quarter, government spending decreased at an annualized rate of 1%, reflecting a significant reduction in non-defense-related expenditures. In corporate news: NVIDIA Corporation's better-than-expected earnings forecast did not surprise investors. After-hours trading revealed that NVIDIA Corporation (NVDA.US) delivered sales forecasts that disappointed some investors, exacerbating market concerns about the growth momentum in AI spending. The company stated in its Q2 earnings report that it expects Q3 revenue to reach $10.8 billion, with fluctuations of about 2%. Although the average analyst forecast was $10.52 billion, some estimates exceeded $11 billion. Following the earnings report, the company's shares experienced a dip of around 2% in after-hours trading. This muted reaction underscores growing skepticism towards the AI hype. After several years of rapid growth, some investors are beginning to worry about a potential bubble. Furthermore, NVIDIA Corporations numerous investment agreements with various companies in the AI sector have raised concerns in the market about cyclical trading that could destabilize the entire industry. Salesforce surged 12% in after-hours trading driven by business growth and gains from its investment in Anthropic. Salesforce (CRM.US) saw a spike of 12% in its stock price during after-hours trading on Wednesday after the cloud software company reported results and guidance that exceeded Wall Street expectations. The company reported Q2 revenue of $11.35 billion, slightly above market expectations. Net income was $3.53 billion, an 87% increase from the same period last year. The company stated that it gained $2.6 billion strategically from its investment in AI startup Anthropic. For Q3, Salesforce expects adjusted earnings per share to be between $3.42 and $3.44, with revenue between $11.42 billion and $11.5 billion. Analysts had previously estimated its Q3 adjusted earnings per share at $3.38 and revenue at $11.41 billion. Currently, Salesforce anticipates full-year earnings per share between $16.67 and $16.71 and revenue between $46.1 billion and $46.4 billion, implying an 11% growth based on the midpoint of the range. Apple Inc. will launch its first foldable iPhone at 1 AM Beijing time on September 10. Apple Inc. (AAPL.US) will hold its biggest product launch event of the year at its Cupertino headquarters at 10 AM Pacific time on September 9 (1 AM the next day in Beijing), which is also the first major product launch under CEO John Ternus's stewardship. Apple is expected to unveil its first foldable iPhone, roughly the size of a standard passport when closed, with a screen size close to a small iPad when opened. This will be the most significant design change for the iPhone in nearly 20 years. Additionally, Apple plans to launch the iPhone 18 Pro and Pro Max, featuring faster chips, improved battery life, and significantly upgraded cameras, with at least the larger models equipped with a mechanical aperture. The second-generation iPhone Air and standard iPhone 18 are expected to be delayed until next spring. A new version of the Apple Watch may also debut during the same period. Former CEO Tim Cook will remain as executive chairman. Alphabet Inc. Class C reorganizes DeepMind, moving the 90-person AI responsibility team out. Reports indicate that Alphabet Inc. Class C (GOOG.US, GOOGL.US) plans to move around 90 members of the AI responsibility team out of DeepMind to the global affairs department responsible for lobbying and public policy in early September. This is part of DeepMind's further integration into the Alphabet Inc. Class C framework, with HR and policy teams also being moved out of DeepMind. The AI responsibility team mainly researches cutting-edge AI risks, including testing for chemical, biological, radioactive, and nuclear risks, as well as studying the psychological impact of user interactions with AI. Some employees are concerned that being moved out of DeepMind may widen the gap with the Gemini model development team, potentially weakening independent research and the ability to identify risks in cutting-edge models. Alphabet Inc. Class C stated that the team will still have access to DeepMinds resources, computing power, and personnel, and other teams responsible for model behavior, privacy, and security will remain at DeepMind. This adjustment comes amid ongoing changes in DeepMind's management and talent. Meta agrees to a $16.7 billion settlement concerning addiction lawsuits across multiple states. Reports indicate that Meta Platforms (META.US) has agreed to reach a settlement with various U.S. states, with a maximum payout of $16.7 billion. This landmark agreement addresses accusations that Facebook and Instagram were designed with the intent to harm children (leading to addiction). It is seen as the social media industry's equivalent of the landmark tobacco industry settlement of the 1990s. The agreement is expected to fundamentally change the industry and how young people use social platforms in the U.S. Meta has agreed to provide compensation to states for several public health initiatives, including crisis intervention services, after-school programs, outdoor activities, and youth mental health programs. Meta will also restrict the usage time of Facebook and Instagram for users under 18 to two hours per day, prohibit access to the platform between midnight and 6 AM, and limit notifications sent during class hours. Teens will be allowed to opt for a chronologically ordered feed rather than an algorithmically recommended feed, with parents able to set this option as the default. Children will also not be able to see like counts or other engagement metrics on posts.