Tech bubble fears grow as Nvidia shares slump

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Nvidia’s stock dropped sharply last night despite the chipmaker more than doubling sales to a record $30bn (£22.8bn) in a reaction that will fuel fears of a tech bubble.
Shares in the world’s second-largest publicly traded company lost as much as 8pc in fluctuating trading after its quarterly results were released on Wednesday night.
The market’s negative reaction came despite beating average analyst predictions of $28.9bn in sales. The rise to $30bn meant revenues were more than double what they were in the same quarter just a year ago.
Nvidia’s revenues have surged amid a boom in interest in artificial intelligence (AI). Its chips are seen as the most advanced for such applications.
Jensen Huang, founder and chief executive of the company, said on Wednesday night: “Nvidia achieved record revenues as global data centers are in full throttle to modernize the entire computing stack with accelerated computing and generative AI.”
The company has become one of the most closely watched stocks in the world and is viewed as a barometer for both the health of the tech industry and, more broadly, the US economy.
Michael Ashley Schulman, chief investment officer of Running Point Capital, said Nvidia’s results were “an indicator for the rest of the technology industry, and technology as an industry is an indicator for the rest of the market because many sectors are now technology dependent.”
However, a surge in Nvidia’s stock and the wider tech industry has driven fears of a possible bubble. Keith Buchanan, of Globalt Investments, said on Wednesday: “Nobody has their arms around how long Nvidia can continue to surprise on the upside, but, naturally, it can’t last forever.”
Shares fell more than 7pc in overnight trading despite Nvidia announcing plans for a $50bn share buyback to reward investors.
Before the results were released, shares had dropped by as much as 4.4pc on Wednesday and Wall Street had closed lower.
Giddy shareholder sentiment surrounding Nvidia was on display on Wednesday as investors hosted an Nvidia “watch party” in New York, with the company’s earnings call played over the bar’s speakers.
“It’s hard to think of a more eagerly awaited set of corporate earnings than Nvidia’s,” said Neil Birrell, chief investment officer at Premier Miton Investors ahead of the report. “There’s little doubt that equities will be driven by the tech sector, for good or for bad, in the next few days.”
Nvidia’s stock has risen by almost 3,000pc since 2019 as its graphics processing units – or GPUs – enjoyed surging demand.Tech giants and sovereign nations have ordered tens of thousands of these chips to train AI bots amid surging interest in ChatGPT, the chatbot developed by Silicon Valley start-up OpenAI.Under Mr Huang, Nvidia’s market capitalisation hit $3 trillion in June and it was briefly ranked as the world’s most valuable private company. The company’s meteoric rise has given Mr Huang a net worth of around $110bn. 
Thanks for joining us this evening on the Markets blog. We’ll be back tomorrow morning, ahead of London’s market opening, to keep you up to date with all the latest from the world of finance.
Nvidia issued a third-quarter revenue forecast of $32.5bn tonight, which surpassed Wall Street estimates. However, the company’s earnings report still failed to impress the most bullish investors who have driven a dizzying rally in its shares as they bet billions on the future of generative artificial intelligence.
Shares of the Santa Clara, California-based company fell in after-hours trading and are currently down 5.3pc.
Michael Ashley Schulman, chief investment officer at Running Point Capital in Los Angeles, said:
They beat the average estimates because they came in around $32bn and average estimates were $31bn but some people on the street have them up at like $37bn revenue estimates.
I think you’re seeing some disappointment on some bets but not really disappointment on the company.
The company behind a worldwide Microsoft Windows outage saw shares jump tonight after it predicted decent financial results for the year.
CrowdStrike told investors that its full-year revenue would be $3.89bn to $3.9bn. Analysts had predicted $3.96bn on average, but tonight the market was relieved in the aftermath of last month’s outage.
Burt Podbere, CrowdStrike finance chief, said:
Our market opportunity remains unchanged, and we believe our continued commitment to customers and innovation will drive even more Falcon platform adoption, protecting our customers from rapidly evolving cyber threats and enabling us to achieve our long-term targets.
Shares are up 3.3pc in after-hours trading.
Stocks on Wall Street closed lower Wednesday as a pullback in big technology companies outweighed gains elsewhere in the market.
The S&P 500 fell 0.6pc, weighed down by drops in Nvidia, Apple, Microsoft and Amazon. About 56pc of the stocks in the benchmark index finished in the red. Tech sector stocks include many companies with particularly large values that lean more heavily on the index.
The Dow Jones Industrial Average, which was coming off two consecutive all-time highs, fell 0.4pc. The Nasdaq composite, which is heavily weighted with technology stocks, closed 1.1pc lower.
The selling came ahead of an eagerly anticipated earnings report from the semiconductor company Nvidia, whose chips power AI applications. The company is one of the most influential stocks on Wall Street, with a total market value topping $3 trillion.
Nvidia reported its second-quarter results late Wednesday. Its earnings and revenue topped Wall Street’s forecasts, but the stock fell in after-hours trading. The shares fell 2.1pc during regular trading. They’re still up around 153pc for the year.
The chipmaker is one of several companies that have ridden a wave of enthusiasm over artificial intelligence developments and have been responsible for much of the broader market’s big gains over the last year.
The market’s pullback ahead of Nvidia’s quarterly results may have been partly due to news about another company tied to AI, Super Micro Computer.
The server technology company’s stock sank 19.1pc for the biggest decline among S&P 500 stocks after the company said it was delaying the filing of its annual report.
“The Super Micro story I think has people on edge because they’re so directly linked to the AI theme,” said Ross Mayfield, investment strategist at Baird.
Shares in Nvidia are currently down 4.pc in after-hours trading, despite the chip reporting quarterly revenue of $30bn dollars (£22.7 billion) in its latest round of financial results.
The figure is up 15pc on the last quarter, and up 122pc on the same period a year ago as the firm continues to benefit from the rise of generative AI.
In its quarterly results for the three months to July 28, the company said that revenue from the data centre portion of its business was a record $26.3bn (£19.9 billion) – up 16pc on the previous quarter and 154pc higher than this time last year.
The results beat many analysts’ expectations.
Jensen Huang, founder and chief executive of the US firm, said demand for Nvidia’s current generation of Hopper chips “remains strong” and that the anticipation for its next generation of Blackwell chips was “incredible”.
He added:
Nvidia achieved record revenues as global data centres are in full throttle to modernise the entire computing stack with accelerated computing and generative AI.
Blackwell samples are shipping to our partners and customers. Spectrum-X Ethernet for AI and Nvidia AI Enterprise software are two new product categories achieving significant scale, demonstrating that Nvidia is a full-stack and data centre-scale platform.
Across the entire stack and ecosystem, we are helping frontier model makers to consumer internet services, and now enterprises. Generative AI will revolutionise every industry.
Looking ahead to the next quarter, the company said it expected revenue to rise again, forecasting it to be around $32.5bn.
Nvidia stock dropped tonight despite the chipmaker more than doubling sales to $30bn (£22.8bn) in a reaction that will fuel fears of a tech bubble.
The world’s second-largest publicly traded company lost more than 8pc in fluctuating trading after its quarterly results were released on Wednesday night.
Before the results were released, shares had dropped by as much as 4.4pc.
The market’s negative reaction came despite beating average analyst predictions of $28.9bn in sales.
There is currently some apprehension in the market ahead of tonight’s Nvidia results, according to Tom Cahill, of Ventura Wealth Management. He said:
Over the past couple of weeks, Nvidia has been rising, with the anticipation being that the company is going to do better than expectations.
I think the bar is so high that it’s not hard to imagine them saying growth is going to slow even just a little bit.
That would be very negative for the stock and therefore technology stocks in the market. There’s a little apprehension.
Tech shares dipped today as investors waited to hear Nvidia’s latest results. 
Following several blowout quarterly reports, Nvidia is viewed as the biggest winner so far from AI technology. Its latest results follow concerns about increases in already-hefty spending by Microsoft, Alphabet and other major players in the race to dominate emerging AI technology.
“It’s been the poster child for the AI boom and it’s really led the charge, so it would be hard for the market to move on in spite of a disappointment from Nvidia,” warned Keith Buchanan, senior portfolio manager at Globalt Investments in Atlanta.
“Nobody has their arms around how long Nvidia can continue to surprise on the upside, but, naturally, it can’t last forever,” Mr Buchanan added.
Options pricing shows traders anticipate a move of around 9.8pc in Nvidia’s shares on Thursday, a day after it reports its results, data from analytics firm Orats showed.
Other chip stocks also dipped, with Broadcom and Advanced Micro Devices each losing ground.
Google-owner Alphabet, Microsoft and Amazon also fell.
American shares fell today as the market waiting for financialresults from Nvidia.
The S&P 500 droped 0.6pc, the Nasdaq by 1.1pc and the Dow Jones by 0.4pc.
Michael Ashley Schulman, chief investment officer of Running Point Capital, said that Nvidia’s results were “an indicator for the rest of the technology industry, and technology as an industry is an indicator for the rest of the market because many sectors are now technology dependent.”
“It’s hard to think of a more eagerly awaited set of corporate earnings than Nvidia’s,” said Neil Birrell, chief investment officer at Premier Miton Investors. “There’s little doubt that equities will be driven by the tech sector, for good or for bad, in the next few days.”
Thanks for joining us so far today. Here on the Markets blog, we’ll be back at around 9pm for the much-anticipated Nvidia results.
Wall Street’s main indexes are lower this evening ahead of those earnings, with the tech-heavy Nasdaq leading declines, as focus was squarely on if the recent bull market rally that was led by the AI chip firm and other tech-related shares can be sustained.
The S&P 500 is down 0.7pc, the Dow Jones is down 0.5pc and the Nasdaq is down 1.2pc.
Ford has reportedly told employees it will make changes to its diversity, equity and inclusion initiatives and end its participation in a ranking by an LGBT campaign group.
Jim Farley, chief executive, wrote in an email seen by Bloomberg:
We are mindful that our employees and customers hold a wide range of beliefs … The external and legal environment related to political and social issues continues to evolve.
Ford reportedly said it would no longer engage with the Human Rights Campaign’s Corporate Equality Index and other “best places to work” lists.
Bloomberg reported that the carmaker would also adjust some of its corporate sponsorships and speak less about polarising issues.
Victoria Beckham has pumped millions of pounds into her fashion and beauty empire after it made a £3m loss. Our retail editor Hannah Boland reports:
The former Spice Girls singer, her husband David Beckham and private equity firm Neo Investment Partners provided a cash injection of £6.9m to Mrs Beckham’s fashion and beauty businesses in the 2024 financial year, recently filed accounts show.
Of this, £3m went to her fashion label to meet working capital requirements as it launched new ranges of bags and belts. Another £3.9m was spent on boosting inventory levels in Victoria Beckham Beauty.
The latest accounts showed Victoria Beckham Holdings made a loss of £3m last year, compared to £3.3m a year earlier. The holding business acts as the umbrella company for the luxury fashion brand Victoria Beckham as well as her skincare brand.
David Belhassen, a director of the company and founder of its shareholder Neo, said work was underway to make sure the empire was being built “on ever stronger foundations”.
Read the full story…
The benchmark European stock index rose to its highest since July on Wednesday, boosted by insurance and chemical stocks ahead of closely-watched results from Nvidia and key economic data.
The pan-European Stoxx 600 index, which includes some of Britain’s biggest listed companies, was up 0.3pc. The chemicals sector led gains, up 1.4pc to a more than two-month high. The insurance sector also boosted the index, rising 1.2pc.
Consumer confidence data for the Eurozone is due Thursday, as are consumer price reports from Germany and Spain. A key inflation print for the Euro zone is expected Friday, with investors watching the data for further cues on monetary policy.
The European Central Bank meets in September and markets have priced in a quarter percentage point rate cut, though policymakers have emphasised the need for improving inflation data.
Europe’s technology sector pared early gains and was flat ahead of industry heavyweight Nvidia’s second-quarter results expected after the close of US markets.
The company’s performance serves as a crucial indicator of market trends with even a slight miss likely to hurt sentiment around artificial intelligence-related companies, even as European stocks have broadly recovered from a US tech-led global equity selloff in early August.
European chip stocks were mixed, with ASM International and STMicroelectronics down 0.7pc and 0.9pc, while ASML rose 0.7pc.
Banking stocks dropped today on fears that Rachel Reeves might impose heavier taxes on the sector.
Dan Coatsworth, investment analyst at AJ Bell, summed up a common view shared this afternoon:
It’s about as easy a target as you can get. No one is going to shed any tears if the banks are forced to hand over more of their profits.
Banks have made big money from higher interest rates, profiting when the rest of the country has struggled through a cost-of-living crisis.
If the oil and gas industry can be slapped with a windfall tax as a result of a spike in energy prices, so can the banks as a result of higher rates.
Investors didn’t like their chances and were quick to sell down shares in NatWest, Barclays, Lloyds and HSBC.
Rachel Reeves has “no good reason” to raise taxes, a top economist has warned, as he cautioned that the Chancellor risked crushing the economic recovery with too much gloom.
Kallum Pickering, chief economist at City investment bank Peel Hunt, said Ms Reeves and Sir Keir Starmer had “over-egged the misery pudding” at a time when the economy was growing strongly.
He wrote in an investment note sent to clients:
The gloomy narrative is at odds with the prevailing economic backdrop. Private sector balance sheets are healthy, labour markets are strong, and UK economic growth in the first half of the year was the strongest in the G7.
Reacting to the improving economic situation, consumer and business expectations are recovering nicely. The government should be trying to nurture these green shoots of growth. Instead, its overly downbeat commentary may undermine confidence and frighten consumers and businesses into needless caution.
Sir Keir Starmer said in a speech on Tuesday there was a “deep rot” in society, including a “black hole” in public finances that will require “difficult decisions” to address. He warned that the upcoming budget would “be painful”, widely seen as laying the groundwork for tax rises.
Mr Pickering said:
While it makes sense to try to balance the books gradually as the economy recovers, there is no good reason for the government to undertake a sudden fiscal tightening. Inflation is under control, the economy is recovering, and the government has the confidence of markets.
Now is the time for a soft-touch approach that nudges consumers towards increased consumption and businesses towards more investment.
His warning came as shares in banks tumbled on fears of another tax raid on the industry. A former Whitehall insider told the Financial Times that the sector would be a likely target as lenders have been making “good profits out of higher interest rates” and “no one likes banks.”
The FTSE 100 closed almost flat today, while its mid-cap counterpart fell 0.4pc.
The biggest riser among the blue-chip index of 100 top companies was Coca-Cola Hellenic Bottling Company, up 3.1pc, followed by BAE Systems, up 2.1pc.
Mining company Antofagasta was the biggest faller, down 6pc, followed by JD Sports, down 4.1pc. The major banks were among the biggest fallers, with NatWest losing 3.3pc, Barclays dropping 2.7pc, Lloyds losing 1.7pc and HSBC losing 0.2pc.
Among the FTSE 250 members, the top riser was Genus, up 5.4pc, followed by Trustpilot, up 4.1pc.
Hochschild Mining fell the most, down 8.4pc, while cement company RHI Magnesita fell 6.3pc.
The market has a “wait-and-see mentality”, said Patrick O’Hare, an analyst at Briefing.com, because Nvidia “is primed to move. Everybody knows that. What they don’t know is which way. So, the market is operating in a guarded fashion.”
The market could be in for a rough ride if Nvidia disappoints, analysts said.
“This is the one that could either lift all boats or sink the entire fleet,” said analyst Stephen Innes in his Dark Side Of The Boom newsletter.
Nvidia has seen profits soar thanks to demand for its powerful GPU chips, which have set the industry’s pace in pushing new advances in artificial intelligence.
Nvidia shares fell by as much as 4.4pc today as traders brace themselves for the chipmaker’s results, due out this evening.
The shares, which are currently down by 2.8pc, are a bellwether for the whole tech industry.
Nvidia’s market value has ballooned, thanks to its dominance of the computing hardware behind artificial intelligence. The stock price is up some 3,000pc since 2019 and with a market capitalisation of over $3 trillion, a move in its share price affects the broader market.
“Everyone is thinking about Nvidia’s earnings later today,” said Michael Ashley Schulman, chief investment officer at Running Point Capital in Los Angeles, adding that there was perhaps more apprehension about the numbers than about Federal Reserve chairman Jerome Powell’s Jackson Hole speech last Friday.
He added:
As Nvidia goes, that’s an indicator for the rest of the technology industry. And technology as an industry is an indicator for the rest of the market because many sectors are now technology dependent.
Any disappointment in Nvidia’s results could hurt megacaps and other semiconductor stocks, which have led 2024’s rally on the prospect of AI integration boosting corporate profits.
Euro zone government bond yields fell slightly after rising yesterday as investors waited for Nvidia’s earnings after the US market close and for European inflation data on Friday.
Germany’s 10-year bond yield, the benchmark for the euro zone bloc, fell to 2.262pc from 2.294pc yesterday.
Mohit Kumar, chief economist for Europe at Jefferies, said:
Today the focus would be on the earnings with Nvidia reporting later today. It’s light on the data front.
Chip-maker Nvidia has been at the heart of the artificial intelligence-driven stock market rally, and investors will pore over its results for clues about the longevity of the AI boom.
Confidence in AI wobbled at the start of August, contributing to a stock sell-off that sent investors towards safe-haven government bonds.
Euro zone inflation data is then due on Friday and is expected to show price growth in the bloc slowed to 2.2pc year-on-year in August, down from 2.6pc in July.
Shares in the company behind a worldwide Microsoft Windows outage last month have fallen 2pc this afternoon, hours before the cyber-security company is due to release its results.
The outage occurred after CrowdStrike issued an update containing faulty code to its Falcon cyber defence software, which rendered around 8.5m Windows PCs and servers using it inoperable.
Mark Crouch, market analyst at investment platform eToro, said:
This latest set of results will give investors their first chance to pore over the hard numbers and quantify the impact of that calamitous patch.
Expectations are unsurprisingly depressed to some degree, with the consensus of Wall Street analysts just below the company’s own guidance …
This set of earnings provides an opportunity for the company to win back the confidence of investors if it is able to demonstrate that demand is holding up for its cybersecurity suite of products in terms of contract renewals, particularly the now infamous Falcon platform.
In a statement on its website, CrowdStrike said that it apologised “unreservedly” for the outage.
Oil prices have fallen today, with the benchmark Brent crude down by 0.6pc at around $79 a barrel.
Prices shed some gains from earlier in the week when they jumped after the administration that controls eastern Libya said it would suspend oil production. But it remains unclear how many oil fields are really going offline.
Meanwhile, worries about tensions in the Middle East seem to be easing.
Chris Beauchamp, chief market analyst at online trading platform IG, said:
Oil prices have been unable to hold on to their gains lately, and yesterday’s drop has been followed up with more declines.
Traders have been on edge waiting for a renewal of conflict between Iran and Israel, but so far this has failed to materialise, leaving oil bulls with little to cling to.
Dairy giant Arla has said shoppers are expected to witness higher milk prices later this year due to commodity cost increases.
The Cravendale maker warned that “uncertainty” across the market has resulted in lower availability of milk globally.
The co-operative, which supports thousands of farmers across the UK, said it expects current volatile market conditions to continue into the second half of its financial year.
However, it said consumer spending was strong in the face of pressure on budgets in 2024 so far. It said:
The positive trend on consumer purchasing power from the first half of 2024 should prolong into the second half, especially in Europe as inflationary pressure continues to subside and wages increase.
This is anticipated to translate into a continued upturn in demand for dairy, although it is uncertain how consumers will react to the expected higher retail price levels following the commodity price increases.
The warning came as Arla hailed “robust” trading over the first half of 2024, boosted by its brands, including Lurpak and Arla Protein.
Arla said it witnessed overall volume growth of 11pc across its brand portfolio, with branded revenues up 5.4pc as higher volumes were partly offset by a slowdown in dairy pricing.
Lurpak sales were particularly strong over the past half-year, the food and drink firm said.
Bas Padberg, managing director of Arla Foods UK, said:
Whilst we expect consumer confidence to remain into the second half of the year, trading conditions will be more challenging than we have seen in recent months as commodity markets rise again and we balance reduced global supply with the increasing demand for dairy.
Insurance giant Prudential has revealed a drop in new business profit after tougher trading in its key markets of Hong Kong and China.
The Asia-focused group reported a 3pc fall in new business profit – an important gauge of future earnings for insurers – across Hong Kong, its biggest region, to $651m (£492m) in the six months to June 30.
Its mainland Chinese joint venture also suffered a 33pc decline in new business to $115m (£87 million).
The performance across China and Hong Kong dragged down its overall new business profit result for the half-year, down 1pc to $1.47bn (£1.11 billion), when taking exchange rate movements into account.
The group – which is listed in Hong Kong and London – said it had “taken steps to reposition our business in the Chinese mainland ahead of both regulatory and macro-economic changes”, while it insisted it was on track with 2027 new business profit goals.
Mark Crouch, market analyst at investment platform eToro, said:
The unravelling of Prudential’s share price will have been tough to stomach for investors. The last 18 months have seen the insurer’s shares fall by more than half, currently lumbering at a twelve-year low.
Inflationary pressures and higher interest rates have acted as a constant drag throughout that period. Yet it is Prudential’s heavy exposure to Asia, where consumer demand has been severely shaken post-pandemic, that is the primary reason behind the insurer’s dismal performance …
Ultimately the Pru will require a swift and significant turnaround in the Asian and specifically the Chinese economy to recover. However, with growing concerns looming over China’s property sector, it’s uncertain whether or not that recovery is close at hand.
Berkshire Hathaway has become the first American company outside of the tech sector to hit $1 trillion (£757bn) in market capitalisation.
Shares of Warren Buffett’s investment group rose as much as 1.2pc today, with shares boosted after strong insurance results and positivity around a so-called “soft landing” for the US economy.
Steve Check, chief investment officer of Berkshire investor Check Capital Management, told Bloomberg:
Berkshire has done it the slower, but more sure, way. It’s harder to make money the old-fashioned way.
Wall Street’s main indexes are little changed this afternoon ahead of Nvidia’s earnings report, with the markets focused on whether the recent bull market rally that was led by the AI chip firm and other tech-related shares can be sustained.
The three main indexes have swung between small gains and losses this week, with the Dow drifting near a record high and the S&P 500 within 1pc of an all-time peak, as investors await Nvidia’s results after the bell.
The chip designer’s shares were down 1pc.
Any disappointment in Nvidia’s results could hurt megacaps and other semiconductor stocks, which have led 2024’s rally on the prospect of artificial intelligence integration boosting corporate profits.
Sam Stovall, chief investment strategist at CFRA Research said:
Investors are a little nervous about what they’re going to see and hear from Nvidia … since expectations have been so high, you sort of wonder how much better can it get,” said .
The news itself will be driving not only Nvidia’s shares, but the technology sector and the overall market.
The S&P 500 is down 0.1pc, the Nasdaq Composite is down 0.3pc and the Dow Jones is up less than 0.1pc.
Here’s more on the Thames Water’s plans for bill rises:
Thames Water has said customer bills must rise by more than £200 a year to pay for its turnaround.
The debt-laden utility company proposed increasing average customer bills by as much as 59pc by 2030 in a new business plan for the coming years.
In response to Ofwat’s draft determination on water companies’ plans, Thames Water proposed raising average yearly water bills to £666.50 per customer by 2030. The company said bills could rise to £696 if given extra spending allowances by the regulator.
The average bill in 2025 to 2030 would be £638 under the proposal – which would suggest an increase of £200 per year as average bills in 2023 to 2024 were £433.
Ofwat, the water industry’s regulator, had suggested Thames Water could raise bills by 23pc over 2025 to 2030. But Chris Weston, Thames Water’s chief executive, said such an increase would leave the company in too poor a shape to attract much-needed investment.
Read the full story…
American chip stocks have dropped this afternoon in early US trading as investors await the Nvidia results due out tonight.
The Philadelphia Semiconductor Index, of 30 leading US chip companies, is down 1pc.
John Belton, portfolio manager at Gabelli Funds, told Bloomberg:
Nvidia is obviously the cleanest sort of pure play way for investors to assess the health of the AI infrastructure space. So Nvidia’s earnings are watched because they have direct read-throughs for so many companies in the AI value chain.
That’s all from me today. I’ll leave you in the capable hands of Alex Singleton who will be keeping you updated for the rest of the day.
Investment in Britain’s largest untapped oil field will be put at risk if Labour increases taxes on the North Sea, one of the project’s backers has warned.
Philippe Francois Mathieu, head of international operations at Equinor, suggested the company could pull funding from the much-anticipated Rosebank oilfield project near the Shetland Islands if taxes on fossil fuel producers rise.
He said: “We need to look at our appetite to invest further in the UK based on the fiscal regime… it could be that the economics are really, really hard impacted.
“And in that case, we need to look into what we want to do further with the Rosebank project.”
The warning comes as Sir Keir Starmer and the Chancellor Rachel Reeves prepare to unveil their first Budget in October. 
Labour said in its election manifesto it would end new oil and gas exploration licences and raise a windfall tax on oil companies by three percentage points.
The UK already levies a total tax rate of 75pc on oil producers, including the current windfall tax, ranking among the highest rates imposed by any nation in the world.
Mr Mathieu insisted no decision had yet been made, saying: “As of today, we are continuing Rosebank.”
He added: “What we need to understand before we communicate, or even to strategise, and decide internally what the future for us in the UK looks like, is to understand the fiscal regime by the new Labour government.  
“That’s going to determine what appetite to invest more in the UK we have.”
All eyes are on the $3 trillion American chip giant Nvidia as it prepares to announce its earnings later today.
The company, along with a handful of other firms, sits at the vanguard of an AI boom that has sent investors into a frenzy over the potential economy implications of the technology.
Nvidia is expected to project revenue growth of more than 70pc for the current quarter this evening, with any disappointment likely to expand far beyond its own share price.
Justin Onuekwusi, chief investment officer at wealth manager St James Place, said: “The Nvidia result has become very much like a macro event, in some ways as big as the payrolls and CPI releases in terms of market impact.
“There’s a lot of money, a lot of leverage in these consensus names and it will take only a slight disappointment to cause significant volatility in markets.”
Thames Water has claimed it will be unable to stay afloat unless regulators allow it to raise customers’ bills and follow through on its spending plans.
The utility giant is creaking under a mountain of debt and hunting for about £3.3 billion of new equity from investors before it runs out of cash at the end of May.
It had previously asked water industry watchdog Ofwat for permission to raise bills by 40pc and spend £22 billion by the end of the decade on fixing chronic leaks and sewage spills and developing new water supplies.
However, Ofwat last month rejected those plans, saying it would only be allowed to raise bills by 23pc and spend £16.8 billion.
Chris Weston, Thames Water’s chief executive, said: “On the basis of the draft determination given to us by Ofwat, both our own and independent analysis shows that our plan would be neither financeable nor investible and therefore not deliverable. It would also prevent the turnaround and recovery of the company.” 
Thames Water now wants to push through an average annual bill increase of 52pc by 2030 – an increase on its prior plans.
The collapsed retailer Ted Baker is to relaunch its online business in the UK thanks to a deal struck by its US parent. 
It comes after Ted Baker’s remaining UK stores were forced shut this month following the collapse of the chain’s UK operator No Ordinary Designer Label into administration earlier in the year.  
The fashion brand’s American parent, Authentic Brand Group, said on Wednesday it had inked a deal with a new business partner, United Legwear & Apparel, to manage Ted Baker’s online retail business in the region. 
Both Frasers Group, which owns Sports Direct, and Next were reported to be eyeing separate deals with the chain following its administration, but neither came to pass.
The boss of Wetherspoons has defended pre-flight drinking as he said the pub chain removed two-for-one alcohol deals and “shooters” from airport menus “years ago”.
Sir Tim Martin said Wetherspoons’ airport pubs no longer served shots such as Jägerbombs, adding that alcoholic drinks made up just a third of sales at these sites over the past four weeks.
He said: “We’ve had no complaints about our pubs from the airport authorities or airlines that I’m aware of in recent years.
“Years ago we stopped selling ‘shooters’ at airports, as well as ‘double-up’ offers. Ryanair in contrast offers a discount on Irish whiskey if a double is ordered.”
Our transport editor Christopher Jasper has the latest:
It comes after Michael O’Leary, the group chief executive of Ryanair, called for a two drinks per passenger limit at airport bars to curb drunken disorder on flights. Mr O’Leary said this was one of his chief recommendations to the new Labour Government.
Over the past four weeks, the height of the summer travel season, Wetherspoons’ airport pubs derived only 33pc of sales from alcohol, Sir Tim said. A total 25pc of sales came from soft drinks, tea and coffee, with the remainder from food purchases.
Sir Tim said: “Coffee volumes, which include free refills, approximately match lager volumes at our airport pubs.”
Wetherspoons operates The Windmill pub at Stansted Airport, Ryanair’s biggest base, and also has three outlets at Gatwick and two at Heathrow, all but one of them located after passengers have cleared security checks.
Ryanair identified four airports – Liverpool, Manchester, Glasgow and Edinburgh – as being particularly problematic for in-flight rowdiness. Wetherspoons only has a pub in Edinburgh, having closed several outlets during Covid.
Read the full story
Care home and retirement housing firm Anchor has borrowed £85 million ($112.5 million) from Legal & General Assurance Society to build affordable housing across the UK.
The company, which manages 54,000 homes for rent and sale to people aged at least 55, plans to build at least 500 homes a year for the next decade, according to reports. 
It comes as Sir Keir Starmer has pledged to build 1.5 million new homes across Britain in the next five years as part of Labour’s plans to boost the economy. 
Banks have said they expect borrowing to rise from housebuilders as a result of the Government’s plans.
Water companies have warned that a planned price cap on bills could make it harder for them to invest in stopping sewage leaks.
Industry trade association Water UK said plans to limit the rise in household water bills to £19 a year on average by regulator Ofwat will stymie firms’ ability to improve their services.
The group has written to Ofwat, arguing that a cap on bills will drive away investors needed to bankroll a multibillion-pound spending plan to modernise the country’s infrastructure. 
Water UK boss David Henderson wrote: “Ofwat’s approach would make it impossible for the water sector to attract the level of investment that it needs and will reduce the UK’s attractiveness to international investment.”
It comes amid mounting anger at water companies over pollution and sewage spills, following a sharp rise in the number of spills in 2023.
Labour vowed to clamp down on water firms and clean up the country’s waterways in the lead up to July’s general election. 
Ofwat said it would consider all responses “carefully” ahead of its final decision later this year.
A spokesman for the regulator said: “We expect to receive responses from many organisations, including water companies, customers, environmental and consumer organisations and investors. These are likely to reflect a diverse range of views on the proposals we have made.”
City law firm Herbert Smith Freehills (HSF) is exploring ways that virtual reality (VR) headsets can be used across its business. 
Here’s the latest from our business reporter Adam Mawardi…
The company is currently experimenting with how VR headsets, including Apple’s Vision Pro, could be used to train lawyers and other employees. 
Alexander Amato-Cravero, director of emerging technology at HSF, said: “We’re trialling it with a view to learning, to understanding and to assessing what the future impact of these advanced technologies might ultimately be for our business.”
Future applications could include using VR to simulate virtual courtrooms and conference rooms in preparation for trials and client meetings, and for difficult conversation training with artificial intelligence powered-avatars.
The VR technology could also be used to reduce air travel as employees rely on headsets for more interactive meetings with clients and colleagues across the globe. 
Mr Amato-Cravero said that using VR headsets could be cheaper and more efficient than current training and development methods, although noted the technology is still “nascent”.
He said that HSF’s VR experiments have already attracted interest from both tech-savvy junior lawyers to more senior partners at the firm.
HSF, which employs more than 2,600 lawyers across 24 offices globally, is testing VR headsets within a “very small group”. The technology has not been rolled out widely across the business. 
Clean energy jobs in the US increased at double the pace of jobs across the rest of the energy industry and US economy overall last year. 
The US Department of Energy said on Wednesday that the number of people employed in clean energy rose 4.2pc in 2023, compared to economy-wide jobs growth of 2pc. 
Jobs in electric vehicles (EVs) and renewable energy sectors saw “significant” growth, it said. Jobs in solar and wind grew by 5.3pc and 3.5pc respectively.
Scandinavian airline SAS has exited US Chapter 11 bankruptcy proceedings following a restructure and a change of ownership. 
The airline had filed for bankruptcy protection in the US in July 2022 as it buckled under the weight of $2bn in debts and the economic aftershock of the pandemic.
The carrier is now owned by a consortium of firms including the US investors Castlelake, the Danish state, and Franco-Dutch airline Air France-KLM.
SAS chief executive Anko van der Werff heralded “a new era” for the firm as it emerged from bankruptcy on Wednesday.
SpaceX has delayed a mission carrying a risk-taking billionaire further from Earth than any human since NASA’s Apollo programme.
Elon Musk’s company said early on Tuesday morning that bad weather meant the launch was on hold until at least August 30.
“Due to unfavourable weather forecasted in the Dragon’s splashdown areas off the coast of Florida, we are now standing down from tonight and tomorrow’s Falcon 9 launch opportunities of Polaris Dawn,” SpaceX said. 
“Teams will continue to monitor weather for favourable launch and return conditions.”
The SpaceX mission is scheduled to carry billionaire entrepreneur Jared Isaacman hundreds of miles from Earth, where he will perform a spacewalk in a newly designed spacesuit intended for use on future Moon missions.
Petrol should be 6p per litre cheaper than the price drivers are paying at the pump, the RAC has said. 
The road side assistance business has called on forecourts to lower their prices to reflect the fact that wholesale prices on crude oil have been falling since the start of July.
It believes the recent fall in the price of oil and the strengthening of the pound – the two biggest factors in determining the wholesale price of petrol and diesel – are not reflected in the current price of fuel.
Our energy editor Jonathan Leake reports…
The average price of petrol in the UK is currently 142p a litre. However, data from RAC Fuel Watch shows the delivered wholesale price of petrol averaged 103p a litre last week. 
Allowing for a retailer margin of 10p – 2p more than the long-term average of 8p, this should lead to average petrol prices of just under 136p including VAT, RAC argued.
Diesel should be being sold for 139p, rather than the current average of 147p.
RAC analysis reveals that the UK has now had the questionable honour of having the most expensive diesel in Europe for 16 of the last 17 weeks, and that’s even with a 5p fuel duty discount.
RAC head of policy Simon Williams said: “The biggest retailers’ refusal not to reduce their prices to fairer levels is continuing to cost drivers dear. 
“It is all the more outrageous when you factor in that we’re all meant to be benefitting from a temporary 5p cut in fuel duty, that looks likely to disappear in the coming months. 
“While the Competition and Markets Authority has clearly stated drivers were overcharged last year, it’s blatantly apparent from our data that this problem is persisting this year.
“If prices don’t fall dramatically in the next week or so, we believe the government and the CMA should get all the biggest retailers together to demand an explanation. Tough action needs to be taken to change this as drivers are losing out badly every time they fill up. 
“Artificially high pump prices also contribute to a higher level of inflation – so if prices were nearer where they should be, inflation would be lower, benefitting borrowers and the wider economy.”
The boss of electric vehicle (EV) maker Polestar has stepped down after seven years in post, as the manufacturer grapples with a slowdown in demand for EVs.
Polestar said on Wednesday that Thomas Ingenlath, who has led the company since 2017, would be replaced by Michael Lohscheller, the former chief of Stellantis-owned carmaker Opel. 
It follows a split between Polestar and its former financial backer and owner Volvo earlier this year, after Volvo said it would no longer financially back the company and would seek to sell its 48pc stake to other shareholders.
In an interview with The Telegraph earlier this year, Mr Ingenlath blamed drivers being “scared of change” for the slowdown in EV demand, and claimed that rivals slowing their electrification plans were falling into a “trap”.
He said: “I see far too many people hesitating with that and being scared of change. That is just not a good recipe for the future.”
He added that manufacturers pumping the breaks on EV rollout plans will be left at a disadvantage given the complexities of launching new vehicles.
“There’s an incredible threat and danger if you don’t embrace future innovation and believe in that technology – the electric drivetrains, the innovation in battery, the innovation in modern electronics and software,” he said.
Masses of German firms are falling victim to data theft, industrial espionage or sabotage, sending the cost of dealing with damage rising to a record €267 billion (£225bn).
Around 70pc of firms polled by tech lobby Bitkom between April and June said the attacks were caused by organised criminal gangs, while foreign security services were fingered as perpetrators in about a fifth of cases. 
China was named the most frequent source of attacks, surpassing Russia, while attacks from non-European Union nations in eastern Europe also increased. 
It comes amid mounting worries over levels of Chinese cybercrime that have contributed to heightening tensions between Beijing and western powers. 
The company that runs Starbucks’ coffee shops in Malaysia has swung to a loss in the wake of consumer boycotts over the Israel/Gaza conflict. 
Berjaya Food plunged into the red over the three months to June, which it blamed mainly on “the current sentiment in relation to the conflict in the Middle East”.
Starbucks has faced boycotts and protests across the world over alleged links to Israel. The chain has said it has never given money to Israel or its military that the perception of any connection is driven by misinformation online.
It comes after Starbucks unceremoniously parted ways with its chief executive, Laxman Narasimhan, this month after a turgid year for the company which saw its sales slip. Brian Niccol, the former chief executive of Mexican chain Chipotle, was hired to replace him.
Starbucks is not the only big consumer brand to face boycotts and protests over a perceived link with Israel. 
McDonalds, too, became the focus of anger after photos and videos on social media emerged showing its stores in Israel giving meals to Israel Defence Forces (IDF) soldiers after the Oct. 7 attack by Hamas.
Eggs laid by housed birds will be able to be labelled ‘free range’ in a move designed to slash the red tape faced by farmers.
The Department for Environment, Food and Rural Affairs (DEFRA) said on Wednesday it would relax egg labeling rules so farmers can call eggs ‘free range’ even if birds have been housed for several months to protect them from avian influenza.
It comes as the UK has faced major outbreaks of the disease over recent years, which led to empty shelves at points. 
Farmers previously were forced to label free-range eggs as barn eggs if the birds were kept indoors for more than 16 weeks, leading to increased costs.
Morrisons is to cut the price of more than 2,000 products as the supermarket battles to claw back market share from rivals. 
The supermarket said on Wednesday it would lower the price of a large range of fridge, freezer and cupboard foods – although the discounts will only be offered to customers who use its ‘More’ loyalty cards.
It comes as Morrisons is battling to reclaim market share after it was overtaken by Aldi in 2022. Earlier this year it began price matching both Aldi and Lidl.
Carmaker Toyota has suspended production at all its factories in Japan because of an approaching typhoon.
Some 28 production lines at 14 group companies will suspend operations from Wednesday afternoon, the company said.
It comes as the “extremely strong” Typhoon Shanshan is approaching southern Japan, with gusts of up to 252 kilometres (157 miles) per hour and heavy rain.
City law firms are under growing pressure from Saudi Arabia to hire more of its citizens at their branches in the Kingdom as they cash in on a boom in business in the Gulf.
The Saudis have formally increased the number of local lawyers that foreign firms are required to employ when working out of the oil-rich country.
Our business reporter Adam Mawardi has the latest:
It is further squeezing British law firms already competing for Saudi nationals in the hope of capitalising on the country’s economic transformation plan, known as Vision 2030.
James Lavan, executive director at specialist legal recruitment firm Buchanan Law, said: “There’s only a limited number of Saudi nationals that are practising at the required standard to work at a law firm.
“[There’s] a real interest in trying to hoover up the best local talent as soon as possible because that is going to be one of the major stumbling blocks to firms growing and expanding within the region.”
Several law firms have already resorted to dangling partner promotions at Saudi lawyers to gain a competitive edge over their rivals.
Similarly, firms desperate to retain their own talent have internally promised to fast-track associates to partnership if they work in their Saudi office.
Others have relaxed previous requirements for postgraduate law degrees and even offered Saudi associates six-figure signing bonuses in addition to their tax-free salary packages.
Law firms already face tough competition from the Kingdom’s state-owned companies, including Saudi Aramco, which are using free MBA courses, private school fees and other lavish employee benefits to poach talent from elite law firms.
The law firm gold rush was sparked by Saudi’s Crown Prince Mohammed bin Salman (MBS) in 2022 when he removed restrictions that blocked foreign lawyers from working in the country unless they partnered with local practices.
Read on…
European stock markets rose at the open on Wednesday ahead of a much-anticipated earnings reveal by the US tech behemoth Nvidia. 
London’s FTSE 100 was steady at 8,348.18 points, while the Paris CAC 40 gained 0.3 percent to 7,591.65 and the Frankfurt DAX also climbed 0.3 percent to 18,745.63.
Nvidia, which designs computer chips used for artificial intelligence (AI), has become one of the worlds most valuable companies as government and businesses around the world begin to grapple with the economic impact of AI.
Lego is on course to replace the fossil fuels used in its bricks with more expensive renewable and recycle plastic by 2032, the toymaker said today.
Lego has signed long-term deals to ensure supply after testing more than 600 different materials to potentially replace its oil-based bricks. 
However, the adoption of certified renewable resin in its toys will bring a significant increase in costs to the toymaker, which will be forced to pay as much as 70pc more for the green upgrade. 
Despite this, its chief executive Niels Christiansen indicated that the company did not intend to charge customers more.
Mr Christiansen told Reuters: “With a family-owner committed to sustainability, it’s a privilege that we can pay extra for the raw materials without having to charge customers extra.”
It comes as the company posted a 16pc rise in net profits over the first half of the year, with sales rising 13pc to 31 billion Danish Kroner (£3.5bn).
Losses have widened at Naked Wines, the online wine retailer, as bosses battle to reverse its recent fortunes and restore investors’ faith.
Revenues at the firm, which sells wine to consumers directly from vineyards, fell by 18pc to £290m over the year to April 1, Naked Wines said on Wednesday. Losses before tax grew from £15m to £16.3m. 
In a statement to investors, the company’s chairman Rowan Gormley insisted the company was on track to return to growth but admitted this was “not immediately apparent from the trading results which, although in line with expectations, reflect the company we were, rather than the company we are starting to become”.
After experiencing a massive surge in demand during the pandemic, Naked has struggled with lower demand and a mountain of excess stock since.
The company also on Wednesday announced the appointment of a new chief financial officer, Dominic Neary. Mr Neary was formerly CFO at Mind Gym and will join in November.
Mr Gormley said: “We’re making real progress turning things round. Now that the team has addressed the cost base and liquidity issues, we can focus our attention on the big prize…restoring Naked Wines to profitable growth.”
The Financial Conduct Authority (FCA) is to scrutinise the UK’s pure protection insurance market amid fears competition is not working well. 
The FCA said on Wednesday it plans to launch a market study later this year into the insurance products, which can include critical illness cover and income protection insurance.
These products are designed to help individuals and families if policyholders die or fall into financial troubles. 
However, the watchdog said it was concerned that “the design of commission arrangements may not allow firms to deliver good outcomes to policyholders”.
Sheldon Mills, executive director of consumers and competition at the FCA, said: “Pure protection can offer peace of mind and financial security, often when people are at their most vulnerable. Consumers should be able to buy products which meet their needs and provide fair value.” 
Carmaker Hyundai has said it will double the amount of hybrid cars it makes, amid a slump in demand for ‘pure’ electric vehicles (EVs). 
The company told investors on Wednesday it would increase the number of hybrid cars it makes to 14, expanding outside of compact and mid-sized cars into large and luxury vehicles. 
It comes as demand for EVs has fallen, sparking a retreat from manufacturers such as Ford, Porsche and Mercedes, which have scaled back their ambitions over recent months.
Hyundai said it “aims to address the EV deceleration by expanding its hybrid and new EREV offerings and gradually increasing EV models by 2030 when a recovery in EV demand is expected”.
The company will also launch an extended-range EV that will use a small gasoline engine to keep an on-board battery charged, in a bid to combat so-called ‘range anxiety’ among buyers. It will be capable of traveling more than 900 kilometres on a single charge.
Shares jumped by more than 5pc in afternoon trading in Seoul as Hyundai unveiled a 4 trillion won (£2.27 billion) share buyback to boost investors’ returns.
Stock selloffs in two of China’s biggest consumer companies have wiped more than $18 billion from the fortunes of two of the nation’s richest people.
Zhong Shanshan, China’s richest person and the founder of drinks company Nongfu Spring, lost about $4 billion due to a 12.9pc fall in its share price on Wednesday in Hong Kong, according to the Bloomberg Billionaires Index – leaving him with a total of around $45.5 billion.
Meanwhile Colin Huang, the founder of retailer PDD Holdings Inc, saw his wealth slip by $14.1 billion on Monday, as shares plummeted in the wake of a warning over revenue growth.
It comes as consumer confidence in China is flagging amid worries over the nation’s stuttering economy
Burberry is on course to leave the FTSE 100 index after 15 years amid a collapse in its share price. 
The luxury fashion brand’s shares have plunged by more than 50pc over 2024 so far amid a global slowdown in demand for luxury goods – particularly in the crucial Chinese market.
It has issued a series of profit warnings over recent months, sparking a rout among investors.
It comes after Burberry parted ways with chief executive Jonathan Akeroyd in July after just over two years, drafting in the American fashion executive Joshua Schulman in the hopes of kickstarting a turnaround. 
Mr Schulman, previously the chief executive of handbag brand Coach and Jimmy Choo, was handed a so-called “golden hello” worth as much as £9.2m.
Thanks for joining us. Petrol is in the spotlight this morning following calls from the RAC for lower prices. 
5 things to start your day
1) Energy companies ordered to protect their customers as Reeves slashes winter fuel payment | Suppliers warned over letting customers run into debt as millions of pensioners lose allowance
2) Saudi Arabia pressures City law firms to hire more of its citizens | International firms scramble to attract talent as Kingdom raises local lawyer quota
3) Why Reeves is betting a Nigel Lawson-style policy will boost economic growth | A capital gains raid may well become the revenue raiser the Chancellor has been looking for
4) How Zuckerberg censored Covid on Facebook | Social media giant regularly bowed to White House pressure to remove anti-vaccine posts
5) Matthew Lynn: Gold is soaring on fears of the economic catastrophe Kamala Harris is about to unleash | A continuation of unchecked spending threatens to put the global monetary system on the path to ruin
What happened overnight
On Wall Street, the Dow Jones Industrial Average of 30 leading US companies, inched up to another record high on a mixed day of trading for Wall Street.
The Dow roses than 0.1pc, closing at 41,250.50, while the S&P 500 rose 0.2pc, to close at 5,625.80, and the Nasdaq Composite rose 0.2pc, to close at 17,754.82.
In the bond market, the yield on benchmark 10-year US Treasury notes rose to 3.83pc from 3.82pc late on Monday.
Cryptocurrency bitcoin took the early Asia spotlight, dropping over 6pc after breaking below support around $60,000.
But overall moves in the foreign exchange market were muted as traders awaited fresh hints on the state of the world’s largest economy.
Equity benchmarks in Japan and Australia edged down, while Treasuries opened higher in early Asian trading.
Australian bond yields were steady ahead of the nation’s monthly inflation data.