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Market Insights

Nvidia gains over 9% post earnings, US 100, SPX 500, Gold retreat from record highs

Nvidia's graphics cards: versatile and successful amidst declining gold prices.

Nvidia has been at the forefront of headlines this week, with focus on the tech and AI giants' earnings for the first quarter of 2024.

After the US market closed on Wednesday, Nvidia’s Q1 earnings and revenue smashed estimates for the sixth consecutive quarter, closing 9.32% higher on Thursday after peaking at a new record high of $1.063.20 earlier in the day.

Nvidia EPS Q1, 2024

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Nvidia revenue Q1, 2024

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Nvidia daily chart (23 - 24, May 2024)

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Although SPX 500 and US 100 celebrated these results by following NVDA to new highs, the two US indices in which the tech giant has a large weighting (5.79% and 6.49% respectively), failed to hold onto gains. As this reflects negative sentiment for a large number of stocks across the sectors, speakers from the Fed and strong US PMIs resulted in mixed expectations for the interest rate trajectory in the US.

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With many of the speakers reiterating that the US central bank is in no hurry to reduce rates in the foreseeable future, both indices and other non-yielding assets (like gold) turned cautious.

It’s also important not to negate the fact that gold, a safe-haven asset that is highly sensitive to interest rates, also beat records on Monday after climbing to $2,449.93. Since then, prices have dipped below $2,350 with weekly losses currently above 3%.

Gold weekly chart

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Chart prepared by Tammy Da Costa

But for GBP/USD,  The Bank of England's cancellation of public engagements for its policymakers up until the July 4 UK general election may be positive for the pound, as it lessens the already low risk of a BoE rate cut next month.

As we approach the end of May 2024, next week’s economic agenda leaves inflation consumer confidence and US PCE data in the spotlight which could add to price action next week.

Not investment advice. Past performance does not guarantee or predict future performance.

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