Nvidia Hits New Record, UK Awaits Inflation Data

The UK is poised to release inflation data that could influence the Bank of England's rate decision, crucial ahead of the general elections. The FTSE 100 has declined 3% since May amidst economic uncertainties. Nvidia continued its ascent, becoming the world's most valuable company and leading gains in the S&P500 and Nasdaq which both hit fresh records on Tuesday.

Equities

The FTSE 100 has recovered from recent losses, closing up 0.6% at 8,164.21 points. The index has been oscillating between 8,100 and 8,200 points, with concerns of sharper declines should it fall below 8,100.

Hargreaves Lansdown was a standout performer, with its shares soaring 5.3% after the company confirmed it was on the verge of accepting a £5.41 billion takeover offer from a consortium led by CVC.

Ashtead Group saw its shares dropping 2.0% following announcements of slower projected revenue growth and no immediate plans for a US listing.

Shifting focus to the US, the S&P 500 and Nasdaq both reached new record highs, while the Dow Jones Industrial Average saw a modest increase of 0.15%, ending at 38,834.86 points. The gains in the S&P 500, which rose 0.25% to 5,487.03, and the Nasdaq, up 0.03% to 17,862.23, were largely driven by significant movements in technology stocks, particularly those involved in artificial intelligence.

Nvidia notably surpassed Microsoft to become the world's most valuable company, with a closing market capitalisation of $3.22 trillion, buoyed by its continued success in AI-driven markets. Other semiconductor stocks like Qualcomm, Arm Holdings, and Micron also posted gains between 2.1% and 8.7%, with Micron reaching a new high.

Forex & Commodities

The dollar saw a slight decline against the euro following weaker than expected US retail sales data for May.

US retail sales in May grew by a mere 0.1%, below the anticipated 0.3%. This weaker-than-expected data led to increased speculation about potential Federal Reserve rate cuts later in the year, despite a general projection of just one rate reduction from US central bankers.

The euro edged up to $1.073625, while the dollar index, which measures the currency against a basket of others, remained largely unchanged at 105.30. Meanwhile, the British pound held steady at $1.2705.

Gold prices benefited from the soft US data, rising 0.4% to $2,329.16 per ounce in the spot market.

Additionally, central banks’ activity influenced market movements. New York Federal Reserve President John Williams commented that US interest rates would gradually decrease, although he provided no specific timeline.

In the oil markets, geopolitical tensions in Europe and the Middle East contributed to a more than 1% rise in prices. Brent crude futures increased by 1.3% to $85.33 a barrel, while US West Texas Intermediate crude moved up 1.5% to $81.57 a barrel.