Market Highlights: Wall Street rallies as inflation eases; Nvidia surges 8pc on soaring demand for chips

Nvidia CEO Jensen Huang has revealed the company is struggling to keep up with surging demand for its chips.

ASX set to rise as US inflation hits three-year low. Pic via Getty Images

• ASX set to rise as US inflation hits three-year low

• Nvidia shares surge 8pc on soaring demand; Lithium stock Albemarle jumps 13pc

• YouGov report shows surge in Gen Z Bitcoin ownership

The ASX is set to climb after data showed that US inflation eased in August to hit a three-year low. At 8am AEST, the SPI ASX200 futures contract was pointing up by 0.6%.

Overnight, Wall Street surged on the CPI reading – the S&P 500 gained 1%, the Dow Jones rose by 0.3% and the tech heavy Nasdaq lifted by over 2%.

US consumer prices climbed just 2.5% from last August, down from 2.9% in July, while core prices ticked up slightly to 3.2%.

While this gives the Federal Reserve room to cut interest rates when they convene on September 17, a more modest 25 basis-point cut is now expected instead of a bigger 50-basis point cut.

“The data reinforced bets that the Federal Reserve might lower interest rates by 25 basis points, with the market currently pricing in an 85% probability,” said Erik Boekel at DHF Capital.

Meanwhile, market darling Nvidia popped by over 8% after CEO Jensen Huang revealed the company was struggling to keep up with soaring demand.

Interviewed by Goldman Sachs’s CEO David Solomon last night, Huang said,” Demand is so great that delivery of our components, our technology, infrastructure, and software is really emotional for people.”

“Now what’s amazing is, the first trillion dollars of data centres is going to get accelerated and invented this new type of software called generative AI. Generative AI is not just a tool, it’s a skill," Huang told Solomon.

In other stocks news, Pfizer fell 0.3% despite being upgraded to a Buy rating by Zacks, reflecting its improved earnings estimates.

Meme stock Gamestop plunged 12% after reporting that its revenue fell by nearly a third to $798.3 million in the last quarter.

Albemarle's shares soared 13% after reports that Chinese EV battery maker CATL may have suspended two lepidolite mines, potentially cutting China's lithium carbonate production by 8%. This sparked a buying frenzy in lithium stocks, including those on the ASX yesterday.

Elsewhere, oil prices rebounded from a 3% drop as Hurricane Francine battered key US Gulf oil regions, causing traders to cover their bearish positions.

West Texas Intermediate rose over 2% to settle above US$67 a barrel, while Brent crude topped $70 once again.

Aussie GenZ getting into Bitcoin

YouGov's latest research reveals a big uptick in Aussie Gen Zs getting into Bitcoin over the past year.

According to the survey, 20% of Australians now own digital assets, down from 23% last year.

But it's the younger crowd that's really driving this trend: Gen Z ownership has jumped to 32%, up 11% from the previous year.

Meanwhile, Millennials have raked in an average profit of about $12,476 from trading Bitcoin and other cryptocurrencies, while Gen Z has seen average gains of $5,373.

The survey, which is the largest of its kind in Australia and run annually for Swyftx, shows a noticeable gap between younger and older Aussies when it comes to crypto ownership.

Many older Aussies are still hesitant, citing a lack of understanding and concerns about regulation as major hurdles.

The survey also suggests that up to 6.4 million Aussies could jump into crypto once the regulatory environment is settled.

“The next big wave of local adoption is almost certainly going to be all about the normalisation of digital assets into mainstream society,” said Swyftx CEO, Jason Titman.

“But until we have a settled policy environment that feels familiar to Australian investors, I do expect adoption to track sideways. It is the calm before the storm.”

To other markets …

Gold price fell by 0.2% to US$2,513.68 an ounce.

Oil prices rebounded by over 2%, with Brent crude now trading at US$70.64 a barrel after falling to a US$69 handle yesterday.

The benchmark 10-year US Treasury yield was flat at 3.65%.

The Aussie dollar rose by 0.35% to US66.80 cents.

The iron ore price rose 2% to US$92.85 a tonne.

Bitcoin meanwhile was down 0.4% in the past 24 hours to US$57,351 and Ethereum slipped by 2% to US$2,337.

5 ASX small caps to watch today

Swift Networks (ASX:SW1)
Swift has secured a $1 million contract with Iluka Resources (ASX:ILU) to provide its Swift Access service for 36 months. This deal covers network upgrades and installations at Iluka's Cataby site, as well as subscriptions for both the Cataby and Eneabba mine sites. Swift Access will turn existing TVs into smart TVs, offering communication, entertainment, and site information without needing high bandwidth or costly pay TV systems. The subscription revenue starts this month, with Swift also providing 24/7 technical support.

Chilwa Minerals (ASX:CHW)
Chilwa has announced a major discovery at Lake Chilwa, identifying 52 new heavy mineral sand targets. Recent geophysical surveys have expanded the potential mining area from 20 km² to 40 km² and revealed strong correlations with previous drilling results. The company said anomalies at Nkotamo and Bimbi could significantly boost mineral resources if further drilling confirms the findings. Chilwa is updating its drill plan based on these new insights.

Battery Age Minerals (ASX:BM8)
BM8 has announced exciting new assay results from its Falcon Lake Lithium Project in Ontario, Canada. The recent drilling has revealed significant lithium mineralisation, with standout results including 28.25 metres at 1.30% Li2O and 18.40 metres at 1.88% Li2O. These results have expanded the mineralised zones, especially at the Falcon Little Lake target, showing potential for large-scale deposits along the 5km corridor. The drilling also confirmed that the mineralisation is thickening and extending, enhancing the project's overall prospectivity. With high assay values from most drill holes, BM8 believes the Falcon Lake project is shaping up to be a major find for lithium.

MTM Critical Metals (ASX:MTM)
MTM Critical Metals has announced promising results from its new Flash Joule Heating (FJH) technology, which recovers gold from electronic waste with high efficiency. Initial tests have achieved up to 70% gold recovery without using toxic acids, by rapidly heating e-waste in a chlorine gas atmosphere to separate and collect the metals. This eco-friendly method is scalable and offers a more sustainable alternative to traditional, energy-intensive recycling processes. Given the large volume of e-waste produced globally, which contains valuable metals, MTM believes FJH could significantly improve recycling efficiency and reduce environmental impact.

Critical Resources (ASX:CRR)
CRR has confirmed strategic antimony prospects at its Halls Peak project, with early desktop studies revealing four historic antimony sites that haven't been explored with modern techniques. The Hillgrove South Prospect is adjacent to Larvotto Resources' Hillgrove Antimony-Gold Project, while the Mayview Homestead Stibnite prospect, about 2.7 km east, could be an extension of the Hillgrove system. The company is now planning exploration to assess these targets and has also highlighted the potential to expand the existing Inferred Mineral Resource at Halls Peak, which includes significant zinc, lead, copper, silver, and gold.

Originally published as Market Highlights: Wall Street rallies as inflation eases; Nvidia surges 8pc on soaring demand for chips