There is seemingly no end to the AI bull run after the shovel vendor, Nvidia topped Microsoft and Apple to become the biggest company in the world by market capital, thanks to the endless demand for its artificial intelligence chips. The company's revenue in its latest quarter tripled year-over-year, reaching a staggering $26 billion, beating its already inflated estimates. A partnership between Dell Technologies and Nvidia to build an AI factory to power Elon Musk's xAI supercomputer and its generative AI chatbot, Grok, further excites competition. However, Nvidia's success has also led to employees operating in "semiretirement" mode from inflated stock options and appreciation, while experts express concern over potential bubbles with news rhyming Cisco's success during the dotcom.
EQUITY
The U.S. stock index closed higher on Wednesday, with stocks like Goldman Sachs, Verizon, and Home Depot seeing major gains. In contrast, Boeing, UnitedHealth Group, and Intel ticked lower, suspecting growing equity shifts into AI. Asian stocks traded close to their two-year highs on Thursday, supported by the continued strength in Nvidia. Some analysts have warned that the market range has been poor, suggesting the rally may be built on a shaky foundation even if rate cuts are in sight.
GOLD
Gold prices rallied to their highest level in two weeks on Thursday but fell right after Switzerland cut its interest rate by 0.25%. Softer labour market conditions, slowing inflation, and negative retail sales growth for May pointed towards a receding U.S. economy in the second quarter. This excites investors to expect the Fed to implement two rate cuts for the year instead of just one suggested by Fed Chair Powell. Lower interest rates reduce the opportunity cost of holding non-yielding bullion, making gold more attractive.
OIL
Oil prices hovered around seven-week highs on Thursday, marking ten days of gains. Brent crude futures edged up as Israeli tanks advanced into Gaza, killing nine, in addition to threats made by the Hezbollah leader in relation to Cyprus airport being used by Israel's Air Force. However, the prospect of rising crude inventories weighed on prices, with traders awaiting the delayed weekly inventory report. Prices were also supported by a recovery in China's retail sales.
CURRENCY
The dollar jumped Tuesday's high from its trough after the Switzerland Reserve Bank (SNB) cut its rate by another 0.25%, in line with forecasts after its inflation pressure cooled enough to warrant an economic boost. The franc has performed well against the euro, which continues to be pressured by political turmoil in France and the broader Eurozone. China's yuan fell to a fresh seven-month low against the dollar on Thursday, after the central bank pause, but set a significantly weaker official guidance.
