Nvidia Soars, Euro Strengthens Ahead of ECB Meeting

Equities

On Wednesday, the FTSE 100 modestly increased by 0.2% after experiencing two consecutive sessions of declines. This uptick in the index was supported by fresh economic data which solidified expectations for a US Federal Reserve rate cut in September. The trading session also saw anticipation around the European Central Bank's upcoming decision on interest rates, scheduled for Thursday.

In the UK market, certain stocks displayed noteworthy movements. B&M, the discount retail chain, saw its shares fall sharply by 7.3%, ending as one of the poorest performers on the FTSE 100. This drop followed the company's release of preliminary full-year results which did not meet market expectations. Meanwhile, Centrica reported that its profitability would be significantly higher in the first half of the year, yet its stock declined by 4.8%. The automotive and parts sector, however, led the gains with a 2.9% rise, followed by positive movements in the medical equipment and pharmaceutical sectors, which increased by 2.2% and 1.2%, respectively.

Across the Atlantic, US markets showed strong performance with the S&P 500 and Nasdaq hitting record closing highs, primarily driven by robust contributions from technology stocks. The S&P 500 surged by 1.18%, reaching 5,354.03, while the Nasdaq Composite soared by 1.96% to close at 17,187.91.

In the US, Nvidia stood out with its market valuation reaching the $3 trillion mark for the first time, driven by gains that helped it surpass Apple to become the world's second-most valuable company. The chipmaker's success contributed to a 4.5% jump in the broader chip stocks sector. Another significant mover was Hewlett Packard Enterprise, which rose 10.7% after projecting third-quarter revenues that would surpass analysts' forecasts, buoyed by strong demand for its AI servers.

CrowdStrike Holdings also saw an impressive climb, with its stock jumping 11.9% after it projected second-quarter revenues that would exceed expectations. Conversely, Dollar Tree's shares dipped 4.9% following a disappointing quarterly profit forecast and news of a potential sale or spinoff of its Family Dollar business. Intel experienced a 2.5% increase after Apollo Global Management agreed to purchase a 49% equity interest in a joint venture related to the chipmaker's manufacturing unit in Ireland.

Forex & Commodities

The US dollar saw an uptick following strong data from the services sector, complicating expectations of Federal Reserve easing this year. The dollar index slightly rose by 0.1% to 104.28, despite earlier predictions of a dip. This increase came after the Institute for Supply Management reported a rebound in its nonmanufacturing purchasing managers index to 53.8 in May, up from 49.4 in April, surpassing the anticipated 50.8.

The euro faced a minor setback against the dollar, falling to $1.0874 after the positive US services sector data was released. The market's attention now turns to the European Central Bank's upcoming policy meeting, where a rate cut is highly anticipated.

In Canada, the Bank of Canada reduced interest rates by 25 basis points to 4.75%, marking its first rate cut in four years, with the possibility of further reductions if inflation continues to decline. This decision influenced the dollar to rise slightly against the Canadian dollar to C$1.3688.

Meanwhile, the performance of gold and oil also drew attention. Gold prices climbed, with spot gold rising 0.59% to $2,369 per ounce after a previous 1% increase. Oil prices experienced modest gains amid the shifting interest rate expectations. Brent crude futures went up by $0.31 to $78.72 a barrel, and West Texas Intermediate crude futures increased by $0.41 to $74.48.