Highlights for the morning: Nvidia alarmed the market, Citi vs. the dollar and layoffs at Google

U.S. stock futures are down after Nvidia's report - revenue from the company's key segment fell short of Wall Street's high expectations. Google is betting on efficiency: having reduced the number of managers of small teams by 35% and launched a program of voluntary exits, the company is trying to reduce bureaucracy and keep the balance after large-scale layoffs. At the same time, American corporations are conducting record buybacks: in July alone, $166 billion worth of buybacks were announced, and the total amount exceeded $1 trillion by August. These and other topics are discussed in our review of key events by the morning of August 28.

Futures on the benchmark U.S. market index S&P 500 and the high-tech Nasdaq 100 fell 0.1% and 0.3% respectively after Nvidia shares fell. The quarterly report from the world's most expensive company beat forecasts on both revenue and net income, but revenue from sales in the key data center segment came in below expectations. This alarmed investors, raising questions about the sustainability of the current boom in artificial intelligence, Yahoo Finance writes.

In addition, the chipmaker's total revenue, though at a record high, posted its slowest growth rate since the first quarter of fiscal 2024. Nvidia gave a subdued outlook for the current quarter, reinforcing concerns about the unsustainable pace of investment in AI. Nvidia shares fell about 3 percent in extended trading.

Expectations for Nvidia's report may have been overstated, said Bloomberg Intelligence analyst Kunjan Sobhani. "The negative reaction of [Nvidia] stock looks rather wrong and too sharp," David Wagner of Aptus Capital Advisors told CNBC, adding that investors should "buy them on the dip."

Citigroup strategists recommended investors to increase positions on the weakening dollar and undervaluation of long-term U.S. government bonds, writes Bloomberg. In their opinion, Donald Trump's interference in the work of the Fed may undermine the independence of the regulator and cause an increase in inflation risks.

Experts note that the main reaction of the market will be the weakening of the dollar and the growth of the yield gap between 30- and 5-year bonds. Citigroup has held a position on the "curve steepener" (curve steepener) since Ma, expecting pressure on long-term securities due to the growth of government debt after Trump's tax reform. An additional factor was the US President's decision to fire Fed board member Lisa Cook, which increased fears of political influence on the regulator.

After Trump's statement, the spread between 30- and 5-year Treasuries reached its highest since 2001. Despite the risks to the Fed's independence, the dollar did not weaken much, which analysts attribute to the impact of the political crisis in France, but consider its effect limited and temporary.

Google has cut more than a third of managers who lead small teams as part of an effort to improve efficiency, CNBC writes. According to Brian Welle, vice president of workforce analytics, the number of such managers fell by 35% over the year. Some of them have stayed with the company as individual employees. CEO Sundar Pichai emphasized that the company's goal is to reduce bureaucracy and avoid solving all problems through staff augmentation.

In addition to layoffs, Google launched a Voluntary Exit Program that affected employees in search, marketing, hardware business and HR. According to management, between 3% and 5% of employees in these divisions agreed to the offer. Chief Human Resources Officer Fiona Cicconi noted that many chose the program for a career break or to care for their families.

Although mass layoffs and optimization programs have caused employee anxiety, management assures that the voluntary format is better accepted within the company. Amid these changes, Alphabet's stock has gained 10% since the beginning of the year after a significant rise in 2023-2024.

Canada Goose shares on the New York Stock Exchange jumped nearly 15% after CNBC reports that Bain Capital, the controlling shareholder of the winter clothing maker, has received buyout offers to take the company private, CNBC writes. Goldman Sachs is advising on the deal.

According to sources, Boyu Capital and Advent International have expressed their willingness to value the company at about $1.35 billion, which corresponds to eight times its average annual EBITDA. Bain Capital has not yet made a decision and is waiting for additional offers; once a buyer is selected, the due diligence process will take less than two months.

The rise in quotes lifted Canada Goose's capitalization to $1.37 billion from $1.1 billion prior to CNBC's publication. While this is well below the 2018 peak of $7.7 billion, Bain Capital will realize a substantial return on the $250 million invested in 2013.

Announced share buyback programs in the U.S. exceeded $1 trillion by August 20 - faster than ever before, according to Birinyi Associates, Bloomberg writes. Technology and financial giants are leading the way: Nvidia announced plans to buy back $60 billion worth of shares, Apple - $100 billion, and Alphabet, JPMorgan, Goldman Sachs, Wells Fargo and Bank of America announced buybacks of at least $40 billion each.

In July alone, companies announced buybacks worth $166 billion - a record high for that month. Experts note that buybacks have become a key support for the U.S. stock market, helping the S&P 500 return to historic highs. According to Jeffrey Rubin, head of Birinyi Associates, corporations are showing confidence: "Profits are high, there is enough money to invest, and buybacks are a way to reward shareholders".

The market expects the trend to continue: by the end of the year, the volume of announced programs may reach $1.3 trillion, and completed programs - to update the record. In 2026, according to forecasts, the figure will grow to $1.2 trillion. However, buybacks are drawing criticism from the Donald Trump administration: the Finance Ministry accused Boeing of excessive share buybacks instead of investing in development.

- Japan's broad Topix index was up 0.49 percent.

- The benchmark Nikkei 225 was up 0.59%.

- In South Korea, the Kospi index was up 0.69 percent, while the Kosdaq small-company index was down 0.33 percent.

- Australia's S&P/ASX 200 was up 0.14 percent.

- Futures on the S&P 500 were down 0.11%, the Nasdaq 100 was down 0.28% and the Dow Jones Industrial Average was up 0.15%.

This article was AI-translated and verified by a human editor