As Deutsche Bank's Jim Reid pointed out earlier Wednesday, reaching the current consensus of about $375 billion in fiscal 2030 is still required, which still requires a "significant growth runway", underlining the turbulent nature of the stock.

Indeed, while our “big technology” has deviated from the trade war, NVIDIA stocks have not stopped due to the main drivers of recent investor sentiment, fiscal problems in the U.S. and long-term troubles in the global bond market – their stocks have been lower since the April 7 market, and they have regained a 50% discount, surpassing the 50% roundhill Etf and nasda nasdaq.

The MAG 7 shares account for one-third of the entire S&P 500 S&P 500 market cap, down from the peak of 35% in the second half of last year, but are higher than the low in April and are still so high in wealth concentrations for a few stocks. Big Tech has been quiet lately, but it is unlikely to continue.

Another focus of investors at the U.S. meeting was the minutes of the Federal Reserve's policy meeting from May 6 to 7. There are usually something for everyone in these distributions, but if there is a sign that decision makers are tilted in the fog of tariff uncertainty, it may be: "inflation" is mentioned 85 times, while "employment" and "labor market" are mentioned 23 times and 16 times, respectively.

Looking ahead to Thursday, Asian investors will respond to NVIDIA's revenue and guidance, after the U.S. shut down the bell the day before. Other highlights should be lowered expected interest rates from South Korea's banks, revised U.S. GDP figures, and $44 billion in U.S. fiscal bonds for sale.

Pressure We follow Japan's debt profile to rethink

In the face-to-face between developed economies with significant debt and increasingly vigilant investors, Japan first blinked, announcing that it would reconsider its debt profile strategy for long-term bonds. The United States will follow soon.

Japan has the second longest debt maturity in the G7 country, with an average of 9 years. Decades of ultra-low policy rates have allowed Tokyo to borrow a lot at very low costs in the Japanese government bond yield curve.

But in recent weeks, JGB Auctions' long-term paper appetite has dried up for 30 and 40 years of soaring yields, a two-time fist that forced officials to consider reducing the issuance of long-term bonds to support short-term debt.

In Washington, there are also many debt pressures that are under in Tokyo.

After Moody's downgrade earlier this month, the U.S. no longer has a triple AA credit rating, while the publicly held non-partisan Congressional Budget Office program will rise to 118.5% of GDP in the next 97.8% of 97.8%. It predicts that net interest payments will rise from 3.1% to 4.1% of GDP.

Finally, there is Trump’s tax bill, which is expected to include $3.8 trillion in federal debt over the next decade.

All of this is uneasiness among investors, even if foreign demand in bill auctions remains high, on average, bond auctions are at their lowest in years. The Treasury may be forced to take a page out of Japan's recent script and shorten the profile of its maturity.

WAM

According to the Treasury Department, the shortest "weighted average maturity" (WAM) is 71.7 months in all G7 countries in the United States. This is due to a variety of factors, including increased deficits, holdings for long bonds, and high liquidity and demand at the short end of the curve.

But this number is rarely higher on it. While WAM briefly hit a record 75-month record in 2023 and rose during the pandemic, it was rarely more than 70 months otherwise. Indeed, the average back to 1980 was 61.3 months.

Over the past half century, the Treasury’s WAM shift has been largely driven by the interest rate environment, the economic and financial crisis, and investor preferences. Although today's market, economic and geopolitical trends are unique, they do not point to strengthening investors' demand for long-term bonds.

The decades before the pandemic (a period called “Great Temperature”) are often characterized by falling interest rates, flat yield curves and weak inflation. That era is over, or at least the growing consensus among investors and policy makers.

This largely reflects the belief that inflationary pressures in the coming decades will be higher than those during the “big temperance” period – especially given the move towards high tariffs and protectionism, which means interest rates may remain “higher and higher.”

Meanwhile, the U.S.'s clear move towards increased isolationism and political volatility tends to make global investors consider reducing the increase in its assets denominated in the U.S. dollar. This could make the Treasury more difficult to accept tax rates.

Pressure point

Of course, these are broad assumptions and there are many moving parts. A sharp economic slowdown or recession may flatten the earnings curve and trigger an increase in long-term issuance.

But the curve is currently steep, with the U.S. "term premium" - risk premium investors demanding loans to the Treasury Department "long-term" rather than rolling "short" loans - the highest in a decade.

This creates two problems. First, the Ministry of Finance may prefer to borrow for the long term, but is reluctant to borrow if the yield is too high.

Second, even if the U.S. may borrow cheaper on the short end when the curve is steep, this increases the "rolling risk", which means that governments become more vulnerable to sudden movements of interest rates.

T-Bills' total 22% share of debt repayments has exceeded the 15-20% share recommended by the Treasury Lending Advisory Committee, but it is difficult to see a drop soon. Morgan Stanley analysts outlined a "thought experiment" earlier this month to keep demand for notes and bonds low, with bills likely to be close to 30% by 2027.

Ultimately, the Ministry of Finance supply will depend heavily on investors’ needs. If the major dealer expresses preference for shorter bonds, the "WAM" may drop. Japan will not be the only developed economy to rethink its heavy lending plans.

Can the market be transferred tomorrow?

*Reaction to NVIDIA earnings*Korea interest rate decisions*US GDP, PCE inflation (Q1, second estimate) *U.S. Weekly unemployed claims*U.S. Treasury notes*Auction*Several Fed officials speak at various events. They are: Richmond Fed President Thomas Barkin, Chicago federal government Ustan Goolsbee, Federal Reserve Governor Adriana Kugler and San Francisco President Mary Daly.

The opinions expressed are the opinions of the author. They did not reflect the views of Reuters News, which is committed to integrity, independence and freedom from prejudice under the principle of trust.

(Jamie McGeever)