Nvidia Rallies, Yen Nears Intervention Levels

Nvidia stock surged over 6%, recovering from recent losses as European markets anticipate a higher open, influenced by positive tech stock momentum. Market caution persists with a key US inflation report on the horizon, impacting Federal Reserve interest rate expectations. In currency news, the Japanese yen hovers just below 160 per dollar.

Equities

On Tuesday, the FTSE 100 saw a modest decline, closing down 0.4% at 8,247.79 points. The FTSE 250 also felt the pressure, dropping 1%.

Burberry's shares fell sharply by 4.5%. After enjoying a consistent rise over three sessions, the luxury fashion brand reversed its gains. Melrose Industries, Rolls-Royce, and Senior PLC each recorded losses ranging from 1% to 2.4%.

Admiral Group saw a positive adjustment, with its stock price rising 2.3% after an upgrade by Berenberg to "buy" from "hold."

Across the Atlantic, the US markets showed a mixed but generally positive outlook. The Nasdaq Composite led with a gain of 1.26%, closing at 17,717.65 points, driven by strong performances in the tech sector. The S&P 500 also ended in the green, up 0.39% to 5,469.30 points, with significant contributions from tech giants like Nvidia and Alphabet, each posting substantial gains.

The Dow Jones Industrial Average receded by 0.76%, finishing at 39,112.16 points. This pullback was influenced in part by Walmart, whose stock dropped 2.2% following comments from its CFO about the challenging nature of the second quarter. Home Depot also contributed to the Dow's decline, with its shares falling 3.6%.

Forex & Commodities

The US dollar saw gains against major currencies including the euro, yen, and Swiss franc, buoyed by statements from Fed Governors indicating a cautious approach to rate adjustments depending on economic indicators. US single-family home prices showed a steady increase in April, rising by 0.2% month-on-month and 6.3% year-on-year, further supporting the dollar's position.

In contrast, the British pound managed a slight rise against the dollar, trading at $1.2693. The Japanese yen, on the other hand, was closely watched for potential intervention as it neared the 160 per dollar mark, a level previously prompting significant intervention from Tokyo to support the currency.

Gold prices declined by 0.6% to $2,318.82 per ounce, influenced by the stronger dollar and higher Treasury yields, which make the non-yielding bullion less attractive.

Oil prices also dipped, with Brent futures falling 1.2% to $85.01 a barrel and US crude futures down by 1% to $80.83.