Nvidia Surge Lifts Markets Before US Jobs Report

Nvidia’s strong results drove a broad rally, with the Nikkei 225, Korea’s KOSPI and Taiwan’s TWII gaining as AI-linked tech manufacturers jumped and the dollar index approached a two-week high. Japan’s reported plan for its largest post-pandemic stimulus package sent JGB yields to record highs and pushed the yen to 157.48 per dollar. Investors continued to adjust Fed expectations amid limited economic data, with futures pricing a lower probability of a December rate cut.

Equities

The FTSE 100 fell 0.5% on Wednesday, marking a fifth consecutive daily decline as defence and financial stocks weighed on the index. Defence names were among the weakest performers after signs of renewed US diplomatic efforts over the Russia-Ukraine conflict pressured the sector. BAE Systems fell 4.5% during Wednesday’s session, while Rolls-Royce slipped 0.6% and Babcock International dropped 3.4%. Banking shares also moved lower, falling 0.7% and extending their losing streak to a fifth day.

Precious-metal miners rose 3% as gold prices strengthened. On the FTSE 250, Workspace Group fell 5.3% after reporting a 4% decline in first-half property valuations. WH Smith rose 7.2% after announcing the departure of CEO Carl Cowling following an independent review that revealed accounting problems in its US subsidiary. Sage gained 1.2% after reporting annual operating profit that came in ahead of expectations.

In the United States, Wall Street indexes recovered on Wednesday, with the S&P 500 rising 0.4%, the Dow up 0.1% and the Nasdaq up 0.6%. Technology stocks supported the gains ahead of Nvidia’s quarterly results. Nvidia rose 2.8% during the regular session and then climbed more than 5% afterhours after forecasting stronger-than-expected fourth-quarter revenue. AMD rose 2.8% after the bell, while Alphabet gained 1.6% and Palantir advanced 4%.

Investors paid close attention to Nvidia’s update as a gauge of ongoing demand linked to artificial intelligence. The broader S&P 500 remains more than 3% below its October highs.

Target fell 2.8% on Wednesday after reporting a sharper-than-expected drop in quarterly comparable sales as consumers cut back on discretionary purchases. Walmart, which reports earnings on Thursday morning, ended 0.8% lower.

Forex & Commodities

The dollar strengthened after the latest Federal Reserve minutes indicated that a December rate cut was less likely, sending the dollar index up to 100.25. The yen weakened to 157.5 per dollar in Asian trading after Japan’s finance minister said there had been no specific discussion on foreign exchange at a recent meeting with the Bank of Japan, even as Japanese government bond yields moved higher. Sterling edged lower to $1.3040, while the euro slipped to $1.1510. The New Zealand dollar steadied at $0.5611 after touching a seven-month low late on Wednesday, with markets fully pricing a domestic rate cut next week.

Spot gold eased early this morning to $4063 per ounce as the stronger dollar and fading near-term rate-cut expectations kept prices below the $4100 level. Analysts pointed to resistance around $4155 and said the metal could move closer to the $4000 area if current conditions persist. Silver slipped to $51.07 per ounce, while platinum held at $1546 and palladium moved up to $1389.

Oil prices firmed slightly this morning, with Brent at $63.72 per barrel and West Texas Intermediate at $59.66 after both benchmarks had fallen on Wednesday. The previous session’s decline followed a report suggesting Washington had encouraged Ukraine to consider a framework to end the conflict with Russia, prompting speculation that sanctions on Russian crude might eventually be eased. A larger-than-expected drop in US crude inventories provided some support, although gasoline and distillate stocks rose for the first time in over a month.