(Bloomberg) — Stocks are ending the week on a calmer note as investors assess the outlook for stocks after markets from the U.S. to Europe and Japan hit all-time highs on the back of blockbuster gains. from Nvidia Corp.
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U.S. futures were little changed on Friday after overnight gains pushed the S&P 500 and Nasdaq 100, along with the MSCI All-County Index, to new records. An upbeat outlook for Nvidia, the most valuable chipmaker, helped it rise 16% amid artificial intelligence mania.
Nvidia’s $277 billion one-day gain to its market capitalization on Thursday was the biggest single-session gain in value ever recorded, eclipsing a recent $197 billion gain by Meta Platforms Inc. The question is whether the technological rebound can be sustained and expanded to other sectors. , even as bets on Federal Reserve rate cuts ease amid data showing the world’s largest economy is still strengthening.
“Generative AI will prove to be the growth theme of the decade, and Nvidia’s earnings report demonstrates the current strength of AI infrastructure spending,” said Mark Haefele, chief investment officer at UBS Global Wealth Management. “Beyond technology, we believe investors should also prepare for a possible extension of the stock market rally, which could materialize with a combination of Federal Reserve interest rate cuts, still-solid growth, and a decline. of inflation”.
The Stoxx Europe 600 index rose after also closing at a record high on Thursday. Miners led the rally as most industrial metals rose ahead of expected new U.S. sanctions on Russia that could disrupt supplies.
BASF SE rose as much as 3% after Europe’s biggest chemicals company said its profits will partially recover as it deepens cost cuts to counter high energy costs and a drop in demand. Lender Standard Chartered Plc rose more than 6% after revealing a profit rise and a share buyback. Allianz SE fell after reporting earnings that largely matched estimates.
Gains in European stocks have been largely driven by mega-caps ASML Holding NV, SAP SE, LVMH and Novo Nordisk A/S. Like the United States, Europe now has its own concentration risk: Those four stocks account for more than half of the Stoxx 600’s 3% gain in 2024, versus a combined weighting in the benchmark index of only about 10%. .
Still, global stock returns should broaden after a tight first quarter, although stocks’ performance in 2024 is likely to depend on earnings delivery, according to Citigroup Inc. strategists.
In Asian markets, the Chinese benchmark CSI 300 index extended its gains for a ninth session, while Hong Kong stocks held steady. Australian, Taiwanese and South Korean stocks advanced. Japanese markets were closed on Friday due to a holiday.
Fed hawk
Back in the U.S., traders took the Fed’s more hawkish comments in stride. Three top Federal Reserve officials on Thursday hammered home the message that the U.S. central bank is still on track to cut interest rates. interest this year, although not in the short term. 10-year Treasury yields rose two basis points and the dollar indicator was stable.
In commodities, oil fell as investors weighed signs of a market tightening against lingering demand concerns. Gold fluctuated. Nickel and aluminum rose, but iron ore was headed for the biggest weekly drop in almost a year amid concerns that Chinese steel demand may disappoint.
This week’s key events:
IFO business climate in Germany, Friday
The ECB publishes its survey on inflation expectations in 1 and 3 years on Friday
Some of the main movements in the markets:
Stocks
The Stoxx Europe 600 was up 0.2% at 8:17 a.m. London time
S&P 500 futures little changed
Nasdaq 100 futures little changed
Dow Jones Industrial Average futures little changed
The MSCI Asia Pacific index rose 0.1%
MSCI Emerging Markets Index little changed
Coins
Bloomberg Dollar Spot Index Little Changed
The euro was little changed at $1.0831
The Japanese yen barely changed at 150.60 per dollar.
The offshore yuan was little changed at 7.2093 per dollar.
The pound sterling barely changed and stood at $1.2671.
CRYPTOCURRENCIES
Bitcoin fell 1.1% to $51,102.88
Ether fell 1.5% to $2,940.5.
Captivity
The yield on 10-year Treasury bonds rose two basis points to 4.34%
The 10-year German bond yield rose one basis point to 2.45%
The 10-year UK bond yield was little changed, standing at 4.11%.
Raw Materials
Brent crude fell 0.5% to $83.21 a barrel
Spot gold fell 0.2% to $2,021.27 an ounce.
This story was produced with the help of Bloomberg Automation.
–With help from Michael Msika and Jason Scott.
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