Macro update
Wall Street slips as NVIDIA underwhelms:
The Dow Jones traded flat, but the S&P 500 fell 0.54% and the Nasdaq 100 dropped 1.18% after NVIDIA results – while beating forecasts – failed to sustain artificial intelligence (AI)-driven momentum, sending its shares down 5.5%.
Chip stocks retreat as AI trade cools:
The Philadelphia Semiconductor Index declined 3.2%, threatening its 10-week winning streak, as investors unwound crowded AI positions and rotated into more cyclical sectors.
Sector divergence broadens:
Technology and communication services led the declines, while financials gained 1.3% on strength in major banks; the S&P software and services index rose 1.4%, supported by a 4.0% advance in Salesforce despite cautious guidance.
Asia mixed as defensives firm:
Asian markets were uneven, with Chinese and South Korean equities lower, while the Japanese yen strengthened 0.2% and US 10-year Treasury yields slipped to 4% as investors rotated into safer assets.
Oil steady amid geopolitical uncertainty:
Brent crude oil hovered near $71 and was on track for a roughly 1% weekly decline as US-Iran nuclear talks were extended and OPEC+ prepared to discuss a potential 137,000 barrel per day output increase, keeping crude in a holding pattern.
S&P 500 loses upside momentum
The S&P 500 has come off Wednesday’s 6952 high following NVIDIA’s over 5% share price drop.
A fall through Thursday’s 6860 low may re-engage this year’s daily chart lows between 6824 and 6776. If fallen through, the technical picture would become bearish with the mid-December low at 6720 being in sight.
Were a rise above Wednesday’s high at 6952 to ensue instead, this year’s highs at 6993 – 7002 would be back in play.
Short-term outlook:
Bearish while below Wednesday’s 6952 high.
Medium-term outlook:
Neutral while above the 6721 mid-December low but below the 7002 January peak.
