Daily Market Briefing: Jensen Huang's exit hardens Washington's chip stance days before Shenzhen, as the 10-year yield holds above 5.1% into this morning's PPI

Geopolitics

Huang's fall takes chip relief off the table for next week's Trump–Xi meeting

Nvidia's departing CEO had been the most effective voice in Washington against tighter chip export controls, and analysts now expect the opposite. CNBC reported that the scandal likely removes the option of trading eased chip restrictions for Chinese concessions at the APEC summit in Shenzhen on 18–19 November, and one analyst told CNBC that Congress will likely tighten the rules before year-end. The Council on Foreign Relations said the affair raises questions about Nvidia's role in US export policy, including the president's approvals of chip shipments. China's Foreign Ministry called the spy allegations "entirely groundless" and urged Washington to stop using "spy narratives" as a pretext for a technology blockade, according to Al Jazeera.

Rare earths are the other half of the bargain, and they are still moving slowly. Beijing's Commerce Ministry confirmed on 9 November that it will keep postponing the October 2025 rare-earth export curbs until 10 January 2027, but the case-by-case licensing rules from April 2025 remain in force, and US Ambassador David Perdue said on Wednesday that American companies have waited months for shipments. The pause has also never been published as a formal legal text, according to TechTimes.

Our view: The summit now has less to trade. Washington cannot easily offer chip relief while Congress investigates Nvidia, and Beijing has little reason to speed up heavy rare-earth licenses without it. The most likely outcome is a summit that protects the truce, extends the January deadlines and adds farm or energy purchases, with no movement on technology. That is neutral for broad markets but negative for anyone hoping China sales would return to US chip forecasts. The bigger risk is a Chinese answer to new US chip rules through slower rare-earth approvals, which would hit makers of motors, defense electronics and electric vehicles first.

Commerce's remote-access rule now reaches seven countries, from Malaysia to Brazil

More detail emerged on the Commerce Department's rule to stop Chinese AI firms from renting advanced chips abroad. Reports citing The Information name seven countries: Singapore, Malaysia, Thailand, Indonesia, Brazil, Norway and South Africa. Shipments of Blackwell-class or newer chips to those countries would need licenses, with buyers disclosing each chip's end user and accepting ongoing monitoring. US companies operating data centers there could avoid licenses by blocking remote access from China, Russia and other arms-embargoed countries. The department also plans to formally scrap the Biden-era AI diffusion rule. Forbes reported that Chinese AI firms are rushing to lock in overseas Nvidia capacity before the rule takes effect.

Our view: The rule matters most for what it does not yet say: whether existing rental contracts are covered. If they are, independent operators in Johor, Singapore and Thailand with Chinese tenants lose that business; if not, the rush to sign contracts now will pull GPU demand forward into the fourth quarter. Either way, the US-operator exemption pushes this demand toward American hyperscalers rather than eliminating it.

Trump says the US does not need an Iran deal, while Tehran's clerics urge a review of the nuclear treaty

Trump said the US does not need a deal with Iran because Washington already has Iran's money, adding "we've got their Strait," CNBC reported. Fox News reported that he also said he would strike Iran "right now" if Tehran threatened US allies. In Tehran, the Assembly of Experts urged a review of Iran's defense doctrine and consideration of leaving the Nuclear Non-Proliferation Treaty, although that is not a formal decision. Iran's military said four tankers were hit in the Strait of Hormuz, including two supertankers carrying more than 4 million barrels combined, a claim that could not be verified. The Wall Street Journal reported that Vice President JD Vance is considering face-to-face talks with Iranian security chief Mohsen Rezaei, though US officials described the discussions as preliminary.

Brent settled 3.3% higher at $95.82 and WTI rose 2.6% to $88.74, according to CNBC, reversing part of a slide that has taken Brent down about 20% in November. The National reported on Friday that oil is still on course for a second weekly decline, because Trump's comments reduced fears of renewed US strikes even as attacks on shipping continue.

Our view: The two signals point in different directions, which is why oil keeps swinging by $3 a day. Trump's "no deal needed" line suggests Washington is content with a blockade that keeps Iranian oil off the market, which caps the chance of a quick reopening of Hormuz. A formal move toward NPT exit would be a much bigger escalation and would likely bring back strike risk. For tech investors, the channel is inflation: every return toward $100 Brent makes a second Fed hike in early 2027 more likely.

Putin agrees to let Europe into the next round of Ukraine talks

US envoys Steve Witkoff and Jared Kushner met President Zelensky near Dublin on Thursday evening after talks with Putin in Moscow, the Kyiv Independent and CNN reported. Kushner said Putin agreed that Europe can take part in negotiations, and Zelensky said Europe will be part of the negotiating team rather than consulted separately. Kushner also said the US is working toward the largest prisoner exchange of the war. Witkoff confirmed another round is planned but gave no date or venue, and the two sides gave very different readings of the progress made.

Our view: European participation is a procedural step, not a ceasefire, but it matters for markets because Europe holds the money and the sanctions. A seat at the table makes any deal more durable and raises the odds that frozen Russian assets and sanctions relief become part of the bargain, which is what European banks, defense stocks and gas prices actually trade on.

Events

Houthis claim strikes on Saudi Arabia's Hormuz bypass pipeline

Yemen's Houthis said they attacked a pumping station on Saudi Arabia's East-West oil pipeline and an oil facility at Yanbu on the Red Sea, and claimed an attack on a Saudi Aramco building in Riyadh, according to Reuters reports carried by regional outlets. Saudi Arabia did not confirm any damage, and no independent verification had emerged. The Saudi-led coalition said it destroyed two Houthi drones aimed at Riyadh and eastern Saudi Arabia.

Our view: The target is what matters. The East-West pipeline to Yanbu is Saudi Arabia's main route for exporting crude while Hormuz is restricted, so even claimed strikes on it put a risk premium on the one outlet that has kept Saudi barrels flowing. If damage is confirmed, the market would face disruption at both of the Gulf's export routes at once, which is the scenario behind Goldman Sachs' raised oil forecasts this week.

Israeli strike on a Gaza hospital tests the ceasefire again

An Israeli airstrike hit Nasser Hospital in Khan Younis, killing at least six people including a surgeon, according to Palestinian officials; reported injury counts range from 20 to 40. The Israeli military said it targeted a Hamas brigade commander and other militants sheltering in the hospital, and Hamas called the strike a war crime. The incident adds to the steady erosion of the ceasefire but has had no visible market impact.

Economy

The 10-year yield climbs above 5.1% after a soft 30-year auction and a Fed governor who wants to hike regardless

Treasuries sold off when the cash market reopened after Veterans Day. The 10-year yield rose to a three-week high of about 5.10–5.14% and the 2-year to about 4.87–4.89%, with sources differing by time of day, according to Reuters and TradingView. The $25 billion 30-year bond auction cleared at 5.441% with a bid-to-cover ratio of 2.36, according to auction trackers, which graded demand between "weak" and "in line." Fed Governor Christopher Waller said the central bank should raise rates even if inflation cools, Kitco reported. Fed funds futures fully price a 25 basis point hike at the 8–9 December meeting; CME data put the odds of a 50 basis point move at about 6.5% late Thursday, down from about 14.5% a day earlier.

The dollar index rose 0.3% to its highest level since April 2025, according to Reuters, and is on track for its best week in two months. This morning's producer price index is the next test. Economists expect headline PPI to rise 0.4% in October after 1.3% in September, with core up 0.3% after 0.7%; the Dow Jones consensus has headline PPI up 6.6% from a year earlier, the biggest annual rise since 2022, partly because of a quiet October 2025.

Our view: The bond market, not Nvidia, is the larger valuation risk for growth stocks right now. The 10-year has held above 5% for two sessions despite a fully priced hike, which says investors are demanding more term premium for heavy supply rather than only pricing the Fed. A hot core PPI would feed directly into core PCE estimates and bring 50 basis points back into play. A soft one would likely ease the front end but may do little for the long end while auctions keep tailing. Long-duration software and unprofitable tech remain the most exposed; cash-rich megacaps are better insulated.

Jobless claims rise to 200,000, above forecasts but still near historic lows

Initial jobless claims rose by 9,000 to a seasonally adjusted 200,000 in the week ended 7 November, above the 195,000 economists expected, according to the Labor Department. The prior week was revised up to 191,000. Continuing claims fell by 20,000 to 1.697 million. Claims have been at or below 200,000 for nine straight weeks, and the four-week average was unchanged at 195,250. The labor market gives the Fed no reason to hold back: Reuters noted that October payrolls surged and unemployment fell to 4.1%.

US

Nvidia's board removes Jensen Huang and names Colette Kress interim CEO

Nvidia's board ended Jensen Huang's tenure as CEO on Thursday, with CFO Colette Kress taking over on an interim basis and the board starting a search for a permanent successor, according to Bloomberg and CNBC. Outlets differ on whether he was ousted or resigned. Director Harvey Jones, 73, former chief executive of Synopsys, becomes the board's first chair, according to Bloomberg. CNBC reported that the uncertainty of the board's investigation into whether Huang was "the target of a foreign intelligence effort," and the prospect of congressional probes, made it very difficult to keep him. Huang has been summoned to testify before Congress, CNN reported, and Trump called the episode a "horrible thing."

The market reaction was smaller than feared. Nvidia's 4.3% decline was much milder than the 8.6% drop in after-hours trading on Wednesday, while AMD and Broadcom gained more than 5% each. Analysts cited by Yahoo Finance said customers may use the moment to diversify their chip suppliers. Nvidia reports third-quarter results on 17 November.

This story matters beyond Nvidia's own stock for two reasons. First, Huang was the industry's chief lobbyist against export controls, and his exit removes that voice just as Congress debates tighter rules (see below). Second, the board's own investigation into foreign intelligence targeting is still open, so the risk of further disclosures has not gone away with his departure.

Our view: The orderly handover limits the operational risk: Kress has run Nvidia's finances through the AI boom, and product roadmaps through Rubin are already set. The real change is political. A Nvidia without Huang will have less influence in Washington, which makes stricter China controls and remote-access rules more likely to pass in full. The share shift toward AMD and Broadcom on Thursday was a sentiment trade; actual customer shifts take quarters, because buyers are bound by software, networking and supply commitments. The next real test is the 17 November earnings call, where any comment on China, guidance or leadership will set the tone for the whole AI supply chain.

Congress moves to write chip export limits into the defense bill

Pressure to put China chip restrictions into the fiscal 2027 defense authorization bill grew after Huang's exit, according to Roll Call, The Hill and CNBC. The Senate version of the bill already includes three measures: the Chip Security Act, which would require location verification for controlled AI chips; the AI Overwatch Act, which would give Congress review power over advanced chip licenses; and the MATCH Act, which would press allies to stop selling chipmaking equipment to China. House Speaker Mike Johnson told Politico he supports adding stronger restrictions, and House Minority Leader Hakeem Jeffries said he "strongly supports" keeping them in the final bill. Senator Chris Coons said he is pushing to investigate Huang and Nvidia.

The process is the constraint. The House passed its version in July, but the Senate bill failed a procedural vote 50–46 in July, short of the 60 votes needed, and has not moved since.

Our view: Bipartisan support from both House leaders makes it likely that some chip language survives the final bill this winter. The MATCH Act is the measure investors underestimate: pressure on allies to stop servicing and selling tools in China would hit ASML, Tokyo Electron and the US toolmakers more than any GPU rule hits Nvidia, since China remains a large share of equipment sales. Statutory backing would also fix the legal weakness in the Commerce remote-access rule.

The December funding deadline gets an Iran war rider

Government funding runs out on 11 December, and CNBC reports that Democrats are unlikely to agree to a full-year funding deal before the new Congress is sworn in, which points to another short-term stopgap. Progressive Democrats are pushing party leaders to include language in that stopgap barring the Pentagon from using funds for combat against Iran, according to Just Security's daily roundup.

Our view: A shutdown before Christmas is a real but modest risk; the bigger issue is that an Iran rider would turn a routine stopgap into a war-powers fight. A shutdown would delay data releases at the moment the Fed is deciding on hikes, which tends to add volatility to rates.

China

Hong Kong tech slides further while Chinese chipmakers gain on the Huang fallout

The split we noted on Thursday widened. Alibaba fell 6.8% to HKD 93.8 on Thursday and Tencent lost 2.6%, pushing the Hang Seng Tech index down 2.36%, according to Hong Kong market reports; part of Alibaba's drop was tied to its planned spin-off of the T-Head chip unit. On Friday the Hang Seng opened below 24,000 and traded about 0.9% to 1.5% lower, while Hua Hong Semiconductor rose 2.8% and SMIC 2.6%. SMIC reported third-quarter revenue up 6.1% to $3.19 billion and guided fourth-quarter growth of 4% to 6%. Mainland investors bought about HKD 5.8 billion of Hong Kong stocks through the southbound link on the dip, including Alibaba and AI developer Zhipu, according to BigGo Finance.

Our view: Investors are pricing the same logic on both sides: tighter US controls hurt Chinese platforms that rely on rented Nvidia compute abroad and help domestic foundries that capture the substitution demand. SMIC's single-digit growth guidance is a reminder that the substitution story is real but slow, limited by capacity at advanced nodes. Southbound buying is putting a floor under the big platforms, but the remote-access rule is a direct hit to their AI training plans outside China.

October credit data should confirm a policy-driven boost, not a lending recovery

China's central bank is due to publish October credit data. A Caixin survey expects new yuan loans of about CNY 90 billion, versus CNY 220 billion a year earlier and CNY 1.08 trillion in September, while total social financing is forecast at CNY 1.28 trillion, up from about CNY 815 billion a year earlier, helped by the CNY 800 billion policy-backed financing tool. M2 growth is expected to hold at 7.2%. Earlier in the week, the statistics bureau reported October factory-gate prices up 5.7% from a year earlier, above the 5.3% forecast, while consumer prices rose only 0.7%, below the 0.8% expected.

Our view: Weak bank loans with strong state-led financing is what a property slump looks like when Beijing fills the gap with policy funding. The 5.7% producer inflation, driven largely by energy costs from the Gulf disruption, squeezes manufacturers' margins rather than signalling strong demand, and it complicates any further easing from the PBoC.

EU

EU leaders' first AI summit in Dublin is overshadowed by who speaks for Europe on Ukraine

EU leaders meet in Dublin today for their first summit dedicated to artificial intelligence, focused on competitiveness and AI sovereignty, with Mistral AI's chief executive Arthur Mensch briefing them, according to the Council and Reuters. Inside AI reported that leaders will weigh adjusting AI Act implementation timelines or exemptions for smaller firms, and aim for a political declaration asking the Commission to propose an AI competitiveness package by mid-2027; those outcomes are not confirmed. Euronews reported that a row over who represents Europe in the Ukraine talks is likely to dominate the meeting. Ukraine needs about EUR 70 billion for next year, and a EUR 45 billion loan backed by the EU budget is the leading option, but a decision is expected only at the special European Council on 26–27 November.

Our view: For US tech, a softer AI Act timetable would be a modest positive, mainly for model providers deploying in Europe; it changes little for chip or cloud demand. Europe's AI gap is about capital and power, not rules, and a package due in 2027 will not change that soon. The Ukraine funding decision remains the market-relevant event for European bonds, and it has been pushed to the end of the month.

Spain heads into a 29 November election after its first major general strike in 14 years

Unions said more than 3 million people joined Wednesday's general strike over housing costs and wages, the first backed by Spain's two largest unions in 14 years, according to Al Jazeera and other reports. Police made 115 arrests, mainly after evening clashes in Barcelona and Madrid. The campaign for the snap election, which Prime Minister Pedro Sánchez called after parliament rejected his housing decrees, starts today.

Our view: The housing crisis is now the main election issue, which raises the risk of rent controls and taxes on landlords and property investors whichever side wins. That matters for Spanish real estate and banks with large mortgage books more than for the wider European market.

Other

The yen breaks 160 per dollar and Tokyo's warnings move up to the prime minister

The yen weakened past 160 per dollar on Thursday for the first time since September, according to Bloomberg, and stood at 159.89 on Friday. Finance Minister Satsuki Katayama warned against "one-sided" moves, promised to respond appropriately and said Japan would coordinate with the US Treasury, according to investingLive. Prime Minister Sanae Takaichi said authorities are closely monitoring markets and will work to keep currency markets orderly, FXStreet reported. Japan spent JPY 15.4 trillion defending the yen after it fell to 163.99 in late July, and the New York Fed later disclosed that the US Treasury also bought yen then, its first such intervention since 1998.

Our view: Tokyo's warnings now come from the prime minister, and the explicit reference to US coordination makes a joint intervention more credible than in a normal cycle. But intervention can only slow the move while the gap between US and Japanese rates keeps widening with each Fed hike. For investors, the risk is a sharp yen rally on intervention that forces a quick unwind of yen-funded carry trades, as in July, which tends to hit high-momentum tech stocks globally.

India regains its place as the world's fifth-largest stock market as foreign money returns

India's stock market value has risen to about $5.4 trillion, about $640 billion higher since late October, putting it ahead of Taiwan as the fifth-largest market, according to NewsBytes. Foreign portfolio investors bought a net INR 65,735 crore of Indian equities in November through the 11th, after selling INR 45,162 crore in October. The risk is inflation: October consumer prices rose 6.09%, above the Reserve Bank of India's 6% upper limit, and economists expect a possible 25 basis point hike in December after the RBI raised its rate to 5.50% in October.

Our view: Part of this flow is money leaving the crowded AI trade in Taiwan and Korea for a market with little AI exposure, a rotation that tends to reverse when AI sentiment recovers. Higher rates and oil import costs are the main risks to the rally.