Trump talks up the economy as we await Nvidia and Salesforce earnings

European stocks have hit a fresh record high, with the financials fighting back from recent AI declines thanks to a 5% surge in HSBC shares.

As a whole, the positive sentiment seen throughout Europe does look to be a reflection of the upbeat tone seen in both the US and Asia, with indices all moving higher in tandem. The banking sector found itself in the limelight after recent claims that AI advances would slash their margins and erode profits through new tools that would automatically search and switch to the most competitive products. Nonetheless, the rise in HSBC shares came despite a 7% decline in pre-tax profits, with one-off impairment charges hitting the bottom line after a period of particularly strong wealth management revenues (up 24%).

The Nikkei hit a fresh record high and the Yen lost ground off the back of reports that the Prime Minister Takaichi expressed her concerns over any potential additional rate cuts in a meeting with BoJ Governor Ueda last week. Coming at a time where fiscal stimulus was expected to be counterbalanced by tighter monetary policy, Takaichi clearly wants to see the economy firing on all cylinders despite inflation fears. This flies in the face of the latest comments from the former BoJ Governor Haruhiko Kuroda, who sees it necessary to hike twice in both 2026 and 2027, while warning that higher spending and lower taxes would spark higher inflation. Nonetheless, the weakness of the yen today instead comes at the hands of the surprise announcement that the government have nominated two reflationist academics (Asada and Sato) for the BoJ, with both seen as supporting the expansionary policies of Takaichi. This could yet slow the rise in Japanese interest rates being priced in by markets.

US traders had plenty of fresh commentary from the President yesterday, with Trump treating us all to the longest State of the Union address in history. As expected, the President continued to talk up the economy, stating that  “we have more jobs, more people working today than ever before in the history of our country.” Notably, it has been the jobs market that has been one of the most disappointing parts of the US economic picture since Trump came back into the White House. On the Iran-front, Trump claimed that he favoured a diplomatic resolution, but time clearly is running out. Looking ahead, today sees earnings data from Nvidia and Salesforce after the close, coming hot off the heels of yesterday’s tech-bump that saw both stocks in the green. Notably, yesterday’s Workday earnings didn’t exactly spark a resurgence after their recent declines, with the stock down another 9% in after-market trade. Let’s hope Salesforce can do what Workday couldn’t by convincing the market that they will be beneficiaries of AI rather than its prey. While we have seen plenty of tech volatility over the past month, Nvidia has held its own, largely treading water between the $180-190 zone. However, with Hyperscalers planning huge CapEx spending in 2026, the company looks to have plenty of demand for the time being. Shareholders will be somewhat disappointed to hear that Nvidia are yet to sell a single H200 chip to the Chinese according to information from a US official.