Wall Street Distances Itself From The “Nvidia Effect” And Awaits GDP Figures

Sergio Cisternas Bastias - Hantec Markets

After a tumultuous week, the earnings report from the AI chip manufacturing giant Nvidia captured practically all market attention and significantly influenced the movements of the Nasdaq and the S&P 500. Nvidia’s shares saw a pre-market price increase of over 7% and more than 9% in the following session, rising for the first time in their trading history above $1,000.

Notably, this marks the fifth consecutive earnings report that has significantly exceeded market expectations, with sentiment continuing to strongly indicate "strong buys" or "hold." In 2023 alone, Nvidia's shares have tripled, positioning them as one of the three most valuable stocks in the world’s leading economy.??

The Outlook At Wall Street Continues To Be Dampened Due To An Uncertain Federal Reserve.

However, for Wall Street, the impact was strictly intraday during the immediate session opening. Gains in the indices were dampened following the latest minutes from the Fed’s monetary policy meeting, which still indicates an uncertain context. At present, traders estimate that the entity led by Jerome Powell will reduce rates by about 40 basis points before the end of the year. Key meetings on the calendar are September 18 (immediately after the annual Jackson Hole Symposium) and December 18.?

Meanwhile, the Dollar Index (DXY) ended the week down by approximately 0.37%, following a positive reading of the US PMI and awaiting the GDP reading on Thursday, 31 May, where a contraction is expected compared to the previous reading, which placed GDP at 3.4%. For the upcoming data, market sentiment anticipates a moderation to 1.6%. This comes just ahead of the end of the first half of the year, where we will also see the strength of the labour market through the ADP non-farm employment change figures and the non-farm payrolls on 5 and 7 June, respectively.?

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