European shares close lower as Nvidia, Salesforce lift US tech

European shares closed mostly lower, with France's CAC leading the decline at 1.68%. Italian, Spanish and UK bourses also finished under pressure. Germany's DAX was the exception, eking out a gain of 0.27%.

Benchmark 10-year yields moved mostly higher despite equity weakness. German and French yields rose 1.4 and 1.3 basis points. UK gilts fell 1.3 basis points.

The dollar traded lower against most major currencies. The Australian dollar led gains, followed by the Canadian and New Zealand dollars. The euro, yen and Swiss franc were marginally stronger. Sterling was the only major currency trading slightly lower.

US equity indices rose, supported by sharp post-earnings gains in Nvidia and Salesforce. Nvidia was up about 8% after another beat-and-raise quarter. Salesforce surged roughly 19%. The gains provided an especially strong lift to the technology-heavy Nasdaq indices.

Treasury yields were modestly lower across the curve as traders digested economic data and hawkish Fed comments. Crude oil rose $0.35 to $82.57.

The US goods trade deficit ballooned to $118.80 billion, wider than the $99.0 billion estimate. The larger deficit points to a potential drag from net trade on third-quarter GDP growth.

Initial jobless claims came in at 203,000, below the 208,000 estimate. Claims remain historically low, showing little evidence of rising layoffs. Companies are generally holding on to workers, but hiring demand remains subdued.

Cleveland Fed President Beth Hammack, a 2026 FOMC voter and policy hawk, said "now is the time to act" and does not view current Fed policy as restrictive. Hammack said inflation has remained persistently above target and warned the public could lose confidence in inflation returning to 2%. She noted her estimate of the neutral rate is higher than some other Fed officials.

Chicago Fed President Austan Goolsbee said his biggest near-term concern is that inflation has not been brought under control. He described the low-hiring, low-firing labor market as unusual but said the economy remains stable. Goolsbee warned political pressure on the Fed puts him "on edge," noting political interference with central banks generally leads to higher inflation.

The ECB meeting minutes showed unanimous support for keeping rates unchanged. Policymakers judged a pause was appropriate given uncertainty around the inflationary impact of the energy shock. Members agreed inflation risks remain tilted to the upside, though underlying inflation is contained and longer-term expectations are anchored. The ECB will reassess in September after updated projections.

Although no decision was pre-committed, members generally agreed another rate hike would likely be necessary unless the inflation outlook improves significantly. The eurozone economy has remained more resilient than expected despite the Middle East conflict and higher energy prices.

ECB Governing Council member Dimitar Radev said the October and December meetings remain "live" for additional tightening. He warned waiting for clear evidence of second-round inflation effects could leave the ECB behind the curve. Radev described a 2.5% policy rate as roughly neutral but stressed future decisions will depend on incoming data. Sources have reported the ECB will raise rates in September.

The US Treasury will auction $44 billion of 7-year notes at 1 PM. The 2- and 5-year coupon issues were met with above-average demand, graded B+.

Fed's Kevin Warsh speaks at the Jackson Hole symposium at 10 AM tomorrow.