Today's session in Europe brings a cooling of sentiment, with US indices contracts losing in the of 0.7% to 0.5% range. The Nasdaq 100 (US100) contract retreats close to 0.5% and is trading down to 20600 points today, although volume is currently low, and sentiment could still change by the time the market opens at 2:30 PM GMT.
- Nvidia's results, while very solid and above forecasts, failed to improve sentiment in the markets; its revenue forecast for the next quarter barely managed to beat market forecasts and suggests the lowest quarterly growth rate (7% k/k) since early 2023. Yesterday, the AI giant's shares cheapened 2.5% in after-hours trading, and today the discount has already reached 3.5%. A number of banks have raised their recommendations for the company, including Bernstein and J.P. Morgan, but Wall Street's reaction suggests that investors are worried about profit-taking pressure, after the US market opened.
- Macro data will be in focus today, and the reaction to it could add to volatility. Among other things, the market will await data on benefit claims and the Philadelphia Fed's regional reading at 1:30 PM GMT., as well as home sales, the Kansas City Fed regional and the index of leading indicators at 3 PM GMT. In addition, the Fed's Hammack and Goolsbee will speak. The market may begin to fear that the 'aggressive' tariff policy proclaimed by Trump will backfire on the Fed's actions and force it to pause the cycle of rate cuts next year.
- In recent days, we have seen a number of rather hawkish statements from Federal Reserve policymakers, who have stressed the need for caution in further 'adjustment' of monetary policy while the economy remains robust, while at the same time there is apparent weakness in the labor market. Some spoke, among other things, of a higher neutral rate and stressed that inflation has not fallen to target and that progress in fighting it is slowing.
US100 chart
Looking at the US100, we can see that the benchmark has reached the lower limit of the upward channel after the recent roll-off and a rebound above 20750 points could open the way for it to reach the highs of the first half of November. On the other hand, a bottom breakout could indicate pressure for a retest of 20,000 points as the key, psychological support level.
Source: xStation5
