Nvidia driven rally continues to push US markets higher

The Nvidia rally continued on Friday with the AI giant leading the Nasdaq to another record close, as inflation and Fed concerns took a back seat to the Tech driven rally.

The S&P 500 closed 0.7 per cent higher while the Nasdaq set a new high finishing up 1.1 per cent on the day. The Dow Jones just tipped into the green closing 0.01 per cent higher.

Nvidia shares finished around 2.6 per cent higher in normal trading on Friday, before continuing to trade higher in late trading eventually finishing the day up 4.3 per cent as the stock closed above $1,000 for the first time.

Other Big Tech names also contributed to the rally with Advanced Micro Devices and Intel rising 3.7 per cent and 2.1 per cent, respectively. Meta and Netflix rallied 2.7 per cent and 1.7 per cent each.

In macro economic news, US Investment Bank Goldman Sachs pushed its forecast for the Fed’s first rate cut from July out to September following strong economic and labor data releases during the week. Traders are now pricing in less than a 50 per cent chance the Fed will cut rates at its September meeting, according to the CME FedWatch Tool.

Later in the week, traders will be watching closely for a clearer sense of the inflation outlook, with the release of the monthly Australian consumer price index as well as monthly US core personal consumption expenditure data – the Fed’s preferred inflation gauge. Both figures are forecast to show a cooling of topline inflation.

Turning to US sectors, Communication Services was the best performer closing 1.29 per cent higher, with Technology following closely behind finishing up 1.13 per cent, helped by Nvidia. The worst performing sector and the only one to finish in the red was Healthcare which closed 0.31 per cent lower.

Australia’s April CPI is expected to drop 0.1 per cent to 3.4 per cent compared to the previous month’s figures, while US core PCE is also forecast to drop 0.1 per cent to 0.2 per cent, which would mark the lowest PCE reading so far this year.

Oil prices will come back into focus at the end of the week, when OPEC+ convenes for its next policy meeting. The consortium of oil producing countries is widely expected to prolong its existing output cuts into the second half of the year.

Futures

The SPI futures are pointing to a 0.6 per cent gain.

Currency

One Australian dollar at 7.30am was buying 66.29 US cents.

Commodities

Gold lost 0.12 per cent. Silver added 0.14 per cent. Copper fell 0.81 per cent. Oil gained 1.11 per cent.

Figures around the globe

European markets closed mixed. London’s FTSE fell 0.26 per cent, Frankfurt added 0.01 per cent, and Paris closed 0.09 per cent lower.

Turning to Asian markets, Tokyo’s Nikkei fell 1.17 per cent, Hong Kong’s Hang Seng lost 1.38 per cent while China’s Shanghai Composite closed 0.88 per cent lower.

On Friday, the Australian share market closed 1.08 per cent lower at 7,728.

Ex-dividends
Dalrymple Bay (ASX:DBI) is paying 5.375 cents 67.81 per cent franked
Morphic Ethical Equities Fund Ltd (ASX:MEC) is paying 1.5 cents fully franked

Dividends payable
Bank of Queensland (ASX:BOQ)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

Disclaimer

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