(Reuters) -Nvidia earnings are in the spotlight as pressure on tech stocks rises, while Ukraine and political developments in Japan could also grab attention.
Here’s what coming up in the week ahead in financial markets from Lewis Krauskopf and Suzanne McGee in New York, Kevin Buckland in Tokyo, Dhara Ranasinghe in London and Libby George in Minneapolis.
1/ NVIDIA NEXT
Nvidia’s August 27 earnings report takes on greater significance after tech shares stumbled this week on some caution over the AI boom.
Its dominant position in AI chips has led to another soaring performance in 2025. Last month, it became the first company to top $4 trillion in market value.
Any commentary from the AI bellwether related to demand and spending could have broad ramifications for companies exposed to the technology.
Focus could also fall on Nvidia’s deal with the Trump administration, which gives the U.S. government 15% of revenue from sales of some advanced chips in China.
U.S. Commerce Secretary Howard Lutnick is looking into the government taking equity stakes in Intel and other chipmakers in exchange for grants under a federal act that aims to spur factory-building in the U.S., sources say.
2/ PRICING IN PEACE
Global defence stocks took a beating on signs that peace could return to Ukraine, although geopolitical analysts caution that it’s far too soon to start pricing in a “peace dividend.”
The sector has been on a tear for most of 2025, as conflicts in the Middle East and Ukraine and U.S. pressure prompt governments to bump up defence spending.
That has helped propel stocks like U.S.-based RTX Corp, the parent company of defense contractor Raytheon, roughly 35% higher so far this year. The S&P 500 is up 9%.
Germany’s Rheinmetall has surged 160% and Italian aerospace giant Leonardo S.p.A. is still up 73% even after this week’s selloff.
A de-escalation in the war in Ukraine could prompt further selling but not much given the global great power play taking place, strategists say.
Given that most countries are viewed as “behind the curve” on defence spending, the sector will remain in favour.
3/ EXIT STRATEGY
Political paralysis in Japan is putting pressure on the bond market, with 10-year bond yields hitting the highest since 2008, and 30-year yields within striking distance of all-time peaks.
Calls continue for Prime Minister Shigeru Ishiba to step down following a bruising loss in recent upper house elections, but his refusal has kept worries alive about a loosening of fiscal restraint to cater to up-and-coming opposition parties.
Things could come to a head next week, with Ishiba’s ruling Liberal Democratic Party due to release a fact-finding report on the reasons for the poor poll showing by month-end.
Some observers reckon this could provide the timing for a graceful exit, as it also allows Ishiba to clear key diplomatic meetings with South Korea’s leader this weekend and India’s Narendra Modi a week later.
4/ WATCHING MR. BOND
As the tech selloff grabbed headlines, renewed pressure in bond markets went a little under the radar.
German and French 30-year bond yields this week rose to their highest since 2011, Japanese yields are at their highest in years, UK long-dated bonds sold off again and U.S. 30-year yields are hovering near 5%.
Sure, the reasons behind the selling are well established: debt levels are rising, so governments need to sell more bonds. Some such as Japan need to hike rates, others including the U.S. and UK face still sticky inflation.
Some reckon that fast-money types could be starting to position for a crisis. That the selling pressure on bonds continues is, in itself, a worry for governments now forking out meaningful amounts of their income on debt service payments.
The selloff could be a harbinger of what comes in September when supply picks up.
5/ HIDE AND SEEK
West Africa’s Senegal awaits the results of an International Monetary Fund mission, concluding on Tuesday, to unpick its mammoth hidden debts and move forward.
The scale of the hidden debts, which the IMF pegs at $11.3 billion, has ballooned since September 2024, when its then-new leaders first flagged the issue. Note, Mozambique’s “tuna bond” hidden debt scandal tallied up to just a few billion.
Investors are watching. A communique could shed light on what the IMF does next, after pushing for better debt reporting across emerging markets for years.
Senegal’s scandal is a black eye for the Fund, since it had a monitoring programme at the time.
The IMF must now balance the need to show consequences for misreporting while avoiding punishing Senegal for openness.
Investors hope the Fund will move forward with a long-awaited misreporting waiver after the mission, paving the way for a new programme. Without a waiver, Senegal could have to repay.
(Graphics by Sumanta Sen; Compiled by Dhara Ranasinghe; editing by Christian Schmollinger)
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