Morning Wrap: Taiwan and Asia Are Halting the Chip Crash Despite the Nvidia Espionage Scandal 💡

The weekend was dominated by the scandal surrounding Nvidia, which has clear national security implications. Jensen Huang admitted in an email to employees that he had an affair with Alice Huang, who is affiliated with Megaspeed, an Nvidia client accused of helping sanctioned Chinese companies obtain AI chips. According to the NYT and the FT, U.S. intelligence agencies suspect that she passed information to Beijing. The board has launched an independent investigation and assures that there is no reason to believe any secrets were leaked, but three Republican chairmen of House committees want to hear from Huang in a closed-door hearing as early as November 18.

On the issue of Iran, Trump is combining a softer tone with threats. In an interview with CNN, he stated that a resumption of open war is “highly unlikely” as long as Tehran signs a “very strong agreement” on its nuclear program and the opening of the Strait of Hormuz. At the same time, he noted that three aircraft carriers are stationed in the region and that the U.S. has 38 bridges and power plants in its sights. CENTCOM has also launched Task Force Iron Gate, which is intended to cut off Iran’s land routes and access to the Caspian Sea, complementing the naval blockade that has been in place for months.

Despite talks involving Qatar, the weekend saw new attacks on energy infrastructure. Houthi drones struck the Aramco skyscraper in Riyadh’s financial district, and a suspected attack by Iranian drones halted operations at the Khor Mor gas field in Iraq. Following his election defeat, pressure on Trump to end the war is mounting, as high fuel prices were one of the main reasons for the Republicans’ defeat.

Tensions in U.S.-China trade have eased. Beijing has extended the suspension of 24-percent retaliatory tariffs on U.S. goods by two months (the rate remains at 10%) and has suspended special port fees ahead of the APEC summit. In Washington, meanwhile, Democrats are announcing that once they take control of Congress, they will challenge Trump’s tariffs, starting with Canada.

Europe is facing both hybrid threats and social unrest. Last week, hackers raised the temperature in supermarket cold storage units in Belgium, the Netherlands, Sweden, and Luxembourg to as high as 50°C. Among those affected were Ahold Delhaize, Carrefour, and Colruyt, while a wave of false bomb threats disrupted dozens of flights. In Amsterdam, protesters attempted to break into a Microsoft data center.

In France, protests against the cost of living continued for the fourth weekend in a row: according to the Ministry of the Interior, 146,000 people took to the streets, and police detained more than 360. The National Assembly rejected the revenue section of the 2027 budget; the Senate will begin deliberating on the bill on November 20, and Prime Minister Lecornu is meeting today with labor unions and employers. In Spain, early elections will be held on November 29, in which the far-right Vox party is expected to gain ground.

In the economy, the most important data of the night came from China. Producer Price Index (PPI) inflation accelerated in October to 5.7% y/y (consensus: 5.3%), the highest level since June 2022, driven by rising prices for raw materials and mining. Consumer price inflation (CPI), however, fell to 0.7% y/y (vs. an expected 0.8%), while core CPI fell to 0.8%, with food prices dropping by 2.9%. Rising production costs coupled with weak domestic demand are putting pressure on Chinese companies’ margins, and the real estate market still shows no signs of stabilization.

Japan confirmed a record one-day currency intervention worth approximately $50 billion to defend the yen. The leading indicators index fell to 116.4 points (vs. an expected 116.7), indicating a slight slowdown in the economy.

In the U.S., the market continues to price in about an 80% chance of a Fed rate hike in December, especially following Friday’s better-than-expected jobs report. The yield on 10-year Treasury bonds stands at about 4.87%. The key events this week will be Tuesday’s CPI inflation report and Friday’s PPI report, and today, Bowman, Goolsbee, and Barkin will outline the Fed’s policy direction.

Wall Street had its worst week since April 2025. Following the election, the Nasdaq 100 lost approximately $2.3 trillion in market value amid fears that a Democratic administration would tighten regulations on data center construction, energy consumption, and investment costs. Thursday’s sell-off was so severe that, according to Vanda Research, retail investors sold the most shares in a single day since the pandemic began. On Friday, there was a partial rebound: the Nasdaq Composite gained 1.09% (24,579 points), the S&P 500 rose 0.31% (7,377 points), and the Dow fell 0.46% (51,286 points).

Friday's trading session saw extreme swings in individual stocks. In the S&P 500, the biggest losers were Reddit (−29.6%), Intel (−28.8%), Illumina (−18.6%), Twilio (−14.9%), SanDisk (−13.5%), and Coherent (−11.9%). The latter more than gave back its gains following its earnings report. The biggest gainers were FedEx Freight (+14.8%), Regeneron (+14%), Global Payments (+12.9%), and GoDaddy (+10.7%).

Liz Ann Sonders from Charles Schwab notes that the Nasdaq is oversold, but retail investors—contrary to past behavior—are not buying the dip, so the market “may not yet be fully cleaned out.” In her view, what matters now are changes in capital expenditure (capex) plans and margin outlooks. The VIX index is down about 4.7% this morning, to about 22.6 points.

Futures recovered their overnight losses. At the open on Sunday evening, Nasdaq 100 futures were down about 0.8% following reports about Nvidia, but by Monday morning they were back at breakeven: US100 +0.05% (27,116 points). The US500 is up 0.41% (7,433.5 points), while Dow Jones and Russell 2000 futures are up about 0.6–0.7%, indicating that capital continues to flow toward the traditional economy.

In Asia, the chip market crash came to a halt, with Taiwan leading the way. The Taiex rose 4.9% (reaching as high as 6.7% during the session), breaking a 7-day losing streak after the regulator restricted short selling and put a TWD 500 billion (approx. USD 15.2 billion) stabilization fund on standby. TSMC gained about 4.7%, MediaTek more than 4%, and Foxconn about 6.5%.

In South Korea, investors returned to memory chipmakers, viewing the sell-off as excessive. Goldman Sachs’ AI memory stock index had previously been down 51% from its June peak. SK Hynix gained about 4.6% during the session, and Samsung gained about 2.4%, although the KOSPI itself ended the day around zero. Seoul assures that contracted shipments of Nvidia GPUs are not at risk, and Nvidia, SK Telecom, and Rebellions have announced a partnership to build sovereign AI infrastructure.

In Japan, the Nikkei 225 rose by about 2.5%, and the Topix by about 3%, driven by financials and cyclical stocks, as well as a rebound in semiconductors following last week’s decline to near a technical bear market. The JP225 futures contract is up 1.01% to 58,797 points. In China, the market was calm: the CSI 300 and Shanghai Composite gained about 0.4%, the Hang Seng ended the session unchanged, and Australia’s ASX 200 was near zero.

The dollar is weakening slightly (USDIDX −0.18%, 101.97 points). EUR/USD is up 0.15% to 1.1162, and GBP/USD is up 0.26% to 1.3384, ahead of BoE Governor Andrew Bailey’s speech this evening. USD/JPY stands at 158.22 (−0.09%), and following confirmation of the scale of the intervention, the risk of further action by Tokyo remains high. The New Zealand dollar gained about 1% following the weekend’s parliamentary elections, while the zloty remains stable: USD/PLN 3.9321, EUR/PLN 4.3889.

Oil prices are falling despite the weekend attacks on Aramco and Khor Mor, as the market is betting on diplomacy. Brent is down 1.08% to $96.68 per barrel, and WTI is down 0.62% to $89.76. Trump’s remarks that a resumption of war is “unlikely” are currently carrying more weight than the incidents, but the Strait of Hormuz remains closed, so volatility persists. Natural gas prices in the U.S. are up 1% to $3.03, while European prices are holding steady at 86.72.

Precious metals are rising sharply in price. Gold is up 1.22%, to about $4,119 per ounce, and silver is up 1.62%, to about $52.71. Buyers are ignoring high yields (10-year bonds at about 4.87%) and the nearly 80% probability of a Fed rate hike, with the gains driven by attacks on infrastructure in the Gulf and a weaker dollar.

Nvidia shares in after-hours trading (Blue Ocean) and perpetual contracts on Hyperliquid were trading at around $180.30, which is about 3.4% below Friday’s close ($186.64, +2.8%). The company insists that “today’s news will not slow Nvidia down,” and management expresses full confidence in Huang. However, the schedule is tight: quarterly earnings on November 17, Huang’s congressional hearing on November 18, and a major conference in Washington at the end of the month.

This week, sentiment surrounding AI will be shaped by the earnings reports from CoreWeave, Cisco, and Applied Materials, which will show whether concerns about a decline in AI infrastructure investment are supported by the data. Today, Take-Two Interactive, Occidental Petroleum, KKR, Constellation Energy, and Skydance are reporting earnings. In Europe, it’s worth keeping an eye on retailers affected by cyberattacks (Ahold Delhaize, Carrefour, Colruyt) and French companies in the shadow of protests and the budget dispute.

Bitcoin fell below $74,000 over the weekend, its lowest level since August, and is now trading at around $74,180 (−0.14%). Matt Maley of Miller Tabak warns that a drop below $75,000 would mark a new low. However, a break below the 200-session moving average around $73,000 would be the real warning sign. The cryptocurrency continues to lose ground alongside sell-off-hit tech stocks and is not benefiting from the rebound in Asia.

What to expect from today's session: Europe is set to open slightly higher. The DE40 is up 0.31% (25,835 points), the EU50 is up 0.38%, and the UK100 is up 0.29%. At 8:00 a.m., the German trade balance will be released; at 10:30 a.m., the Sentix index will be reported; and the Eurogroup and ECOFIN will meet throughout the day. In the afternoon, Fed officials will speak (Bowman at 2:40 p.m., Goolsbee at 4:00 p.m., Barkin at 6:15 p.m.); at 4:00 p.m., U.S. wholesale inventories will be released, and Bailey will speak at 6:25 p.m. The key question is whether the oversold Nasdaq (RSI around 31) will manage to stage a rebound despite the scandal at Nvidia, or whether investors will once again start reducing risk ahead of Tuesday’s CPI release.