Global Markets Brace for Nvidia, Japan-China Tensions Rise

Global markets entered the week with cautious sentiment, keeping investors on alert as several key developments shape the economic landscape. The U.S. is set to release August construction spending on Monday, followed by September’s jobs report on Thursday, giving a fresh glimpse into the strength of the labor market and inflation pressures. Despite anticipation, market expectations for a December rate cut have dimmed, fueled by hawkish commentary from policymakers and questions over data reliability.

The spotlight this week is on Nvidia, whose earnings report after Wednesday’s close is being closely watched as a barometer for the booming artificial-intelligence sector. Analysts at LSEG are projecting strong revenue growth, giving the company room to beat expectations and potentially reinforce the AI-driven rally.

Across Asia, markets opened cautiously on Monday. The U.S. dollar saw a modest rise, reflecting investor caution. Heightened tensions between China and Japan have also weighed on Tokyo equities. Shares of Muji’s parent Ryohin Kaikaku, department store operator Isetan Mitsukoshi, and cosmetics giant Shiseido all fell roughly 10% after China issued a warning for its citizens to avoid travel to Japan.

The dispute escalated after Japanese Prime Minister Sanae Takaichi indicated that a Chinese attack on Taiwan could threaten Japan’s security and potentially draw a military response. Japanese media report that a senior diplomat is expected to travel to Beijing to de-escalate tensions, though concerns remain high. Separately, news of Japan planning a $110 billion stimulus package applied pressure on government bonds, highlighting the complexity of balancing growth and fiscal stability.

Investors are now navigating a delicate mix of global tech optimism, regional geopolitical risks, and U.S. economic signals. The coming days may set the tone for market trends into the final quarter, as companies report earnings and policymakers continue to communicate their economic outlooks.