Nvidia Rally Fades, Brings Wall St Down With it

Equities

The FTSE 100 dipped 0.4% amidst looming political uncertainty as the UK braces for its upcoming elections in July. Amongst individual stocks, National Grid's announcement of its intent to offload the Grain LNG terminal saw its shares plummet by 10.9%, marking the steepest decline within the blue-chip index. Hargreaves Lansdown experienced a surge, climbing 14.4% after firmly rejecting a takeover bid valued at £4.67 billion.

In the US, Nvidia's shares soared by 9.32%, closing above the $1,000 mark for the first time. This leap propelled both the S&P 500 and the Nasdaq to touch intraday records, although they later receded from these highs. The S&P 500 eventually closed down by 0.74%, while the Nasdaq composite index slipped by 0.39%.

The Dow Jones Industrial Average faced a more significant retreat, declining 1.53% primarily due to Boeing's steep 7.55% drop after the aerospace giant forecasted a negative free cash flow in 2024 owing to sluggish deliveries. This decline contributed over 90 points to the index's downturn, marking its largest daily percentage drop since March the previous year.

The precious metals mining sector saw a decrease of 1.7%, influenced by falling gold and silver prices. Among other UK stocks, Qinetiq Group provided a brighter spot in the market landscape, with shares hitting a record high following an upgraded financial outlook, boosting the aerospace and defence sector by 2.4%.

Forex & Commodities

On Thursday, the US dollar gained against the euro, propelled by the latest economic data showing a significant uptick in US business activity. The S&P Global flash US Composite PMI Output Index reported a rise to 54.4 in May, indicating the highest level of expansion since April 2022.

Concurrently, the euro dipped 0.2% to $1.080525 despite earlier gains following positive PMI figures from the Eurozone that hinted at an ongoing economic recovery, particularly in manufacturing.

The British pound dropped 0.2% to $1.2689 against the dollar. This movement came after Prime Minister Rishi Sunak's announcement of an impending national election, stirring political uncertainties that influenced the currency's performance.

Gold prices witnessed a downturn, setting the stage for their largest weekly loss in over five months. The dip followed the Federal Reserve's minutes from May's meeting, which conveyed a hawkish stance, raising doubts about impending rate cuts. This sentiment pushed gold to its lowest since May 9, despite a slight recovery on Friday morning.

In the oil markets, prices remained stable with Brent crude slightly up by 2 cents at $81.38 a barrel and West Texas Intermediate (WTI) crude nearly unchanged at $76.86.