| Exit polls suggest victory for Modi. China slams US at Singapore meeting. Nvidia announces new AI initiatives. Here's what you need to know today. Exit polls suggest a resounding victory for Indian Prime Minister Narendra Modi's Bharatiya Janata Party-led alliance, following the conclusion of a weeks-long general election on Saturday. Polls suggest the alliance will clinch substantially more seats than the 272 required for a majority in the 543-seat lower house of parliament, with most pollsters predicting the group will win between 350 and 400 seats. In 2019, the alliance won 352. The news is expected to calm investors and push Indian stocks, bonds and the rupee higher when markets open later today. Votes will be counted on Tuesday. Here's what those exit polls tell us about Modi's dominance in India. Global defense leaders descended on Singapore at the weekend and confronted conflicting visions of the region. While the US touted expanding military exercises and partnerships across the Indo-Pacific, China's delegation pushed back on the narrative, criticizing "outside forces" for interfering with peace and stability. In his speech at the Shangri-La Dialogue China's Defense Minister Dong Jun denounced Washington for pushing through Taiwan-related legislation and continuing arms sales to the island. And, without directly naming the Philippines, he said a certain country had been "emboldened by outside forces" and allowed the US to deploy a missile system. Chinese tourists embarking on adventures at home are forecast to pump a record 6.79 trillion yuan ($938 billion) into the mainland economy this year — topping pre-pandemic levels for the first time. Spending by domestic holidaymakers is expected to be 11% higher than 2019 — before the Covid pandemic stopped most travel, according to a report by the World Travel and Tourism Council and Oxford Economics. Meanwhile, international visitors to China still haven't rebounded. Spending by foreign tourists on the mainland this year is expected to hit 715 billion yuan — about a quarter below 2019 levels. Nvidia CEO Jensen Huang said the company plans to upgrade its AI accelerators every year, announcing a Blackwell Ultra chip for 2025 and a next-generation platform in development called Rubin for 2026. The company also introduced new tools and software models on the eve of the Computex trade show in Taiwan. Nvidia sees the rise of generative AI as a new industrial revolution and expects to play a major role as the tech shifts to personal computers, Huang said at National Taiwan University. Nvidia has been the main beneficiary of a massive flood of AI spending, helping turn the company into the world's most valuable chipmaker. Asian stocks are set to gain in early trading as expectations for Federal Reserve rate cuts were bolstered after the central bank's preferred measure for inflation eased. Oil extended losses after OPEC+ set out a plan to return some barrels back to the market this year. Brent fell toward $80 a barrel after a three-day decline and West Texas Intermediate dropped below $77. Production cuts will continue in full in the third quarter and then be gradually phased out over the following 12 months, the Saudi Energy Ministry after a meeting on Sunday. Meanwhile, Saudi Aramco's $12 billion share sale sold out shortly after the deal opened on Sunday. The end of the week brought some relief to US bond markets, with yields down across the curve as PCE inflation came inline with expectations. The S&P and Dow rallied on the news, with the Nasdaq only slightly in the red. But this was more of a relief rally. In fact, September swaps are still pricing in about-even odds as in-line inflation data were just not good enough. A 0.3% headline month-on-month print and 0.2% core are basically a push relative to what the Fed needs to see to a cut by September. So where do we go now? I think the summer market action is going to be forgettable. The biggest problem going forward for bulls — whether in equities or bonds — is that commodity traders are bracing for a summer heatwave that will lead to commodity volatility, and potentially higher headline inflation prints as well. That's what has people in the US talking about "stagflation," because that slowing growth but still-high inflation is a combination which will keep the Fed on hold, even though it would desperately want to cut. It doesn't help that European inflation numbers were also weak as well, with harmonized CPI for the EU coming in at a whopping 3.8%. Essentially, for the bond bulls, we need to see economic weakness to justify real moves down in yield. By contrast, the equity bulls are going to need to see inflation come down enough to warrant cuts but without the economy falling apart. I rate the bond bull faction as more likely to see any of that in the next couple months. Ed Harrison writes the Everything Risk newsletter. Follow him on X at @edwardnh. | 
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