Nvidia slump and dollar strength dominate market turmoil

Nvidia’s sharp reversal on Thursday, when its shares swung from early gains to close lower, fed into a broader tech-led sell-off that pulled the S&P 500, Nasdaq and Dow into steep declines. The yen moved higher to ¥157.2 per dollar after Japanese officials raised the prospect of intervention and Prime Minister Takaichi approved a ¥21.3 trillion stimulus package, while Brent crude slipped to $62.54 and spot gold traded near $4059. European equity futures and Asian indices also fell, with the Nikkei down 2.4% on Friday and MSCI Asia-Pacific markets retreating further.

Equities

The FTSE 100 fell 0.5% on Wednesday, marking a fifth consecutive daily decline as defence and financial The FTSE 100 rose 0.2% on Thursday, ending a five-day losing run after early strength in defence and energy shares. Rolls-Royce and BAE Systems both added more than 1% during the session, supported by a broader lift across aerospace and defence. Energy stocks also improved as oil prices edged higher.

AstraZeneca closed 0.4% higher after saying its drug aimed at limiting the growth of non-cancerous tumours had been approved in the United States. The company’s update helped steady sentiment in the pharmaceuticals segment.

Halma climbed 9.2% to an all-time high after raising its annual revenue forecast on Thursday, pointing to firm demand from US data centres. Games Workshop rose 13.5% to a record level following a strong half-year forecast that reinforced confidence in its product pipeline.

JD Sports fell 3.9% after stating that annual profit would come in at the lower end of market expectations. Johnson Matthey slipped 3.4% after announcing that its finance chief Richard Pike would move into a new role as chief operating officer. The FTSE 250 ended 0.1% lower, giving up larger early gains, while UK manufacturers reported their sharpest output fall in the three months to November since August 2020.

In the United States, major indices dropped sharply late on Thursday despite strong early momentum. The S&P 500 closed 1.6% lower, the Dow Jones Industrial Average fell 0.8%, and the Nasdaq Composite dropped 2.2%, marking its weakest finish since 11 September. Both the Nasdaq and Dow swung more than 1,000 points from peak to trough.

Nvidia, which had risen as much as 5% earlier in the day after releasing quarterly results, closed 3.2% lower. The company projected fourth-quarter sales ahead of analysts’ estimates and reported stronger-than-expected third-quarter revenue. Its chief executive Jensen Huang said on Thursday that the firm remained confident about AI-related demand. Despite this, the semiconductor index fell 4.8% by the close.

Walmart advanced 6.5% after raising its annual forecast for the second time this year. The retailer also confirmed that it will shift its stock listing from the New York Stock Exchange to the Nasdaq in December, adding momentum to its shares earlier in the day.

Forex & Commodities

The yen moved higher after Japan’s finance minister said intervention remained an option, though the currency stayed close to Thursday’s 10-month low. It traded at ¥157.1 to the dollar later in the session and remained weaker over the week. Against the euro it hovered near ¥181.3, while sterling traded around ¥205.7. The pound rose slightly to $1.309 against the dollar on Friday morning but remained lower over the week ahead of next week’s UK budget.

The dollar strengthened through the week, with the dollar index near 100.07 early on Friday. Investors reduced expectations of a December rate cut after the delayed US non-farm payrolls report on Thursday showed job growth rising by 119,000 in September and the unemployment rate moving up to 4.4%. Federal Reserve officials continued to caution against assuming near-term easing, with Chicago Fed President Austan Goolsbee repeating on Thursday that he is uneasy about cutting rates too soon. Market pricing now puts the likelihood of a December cut at about one quarter.

Spot gold fell early on Friday to $4039 per ounce and headed for a weekly decline. Traders cited continued strength in the dollar and uncertainty over the timing of US rate cuts as reasons for reduced demand. Physical demand across major Asian hubs also remained soft this week.

Oil prices fell again on Friday as Brent crude slipped to $62.42 per barrel and West Texas Intermediate moved down to $57.97. Both benchmarks were on track for weekly losses after the United States pushed for progress on a Russia-Ukraine peace plan.