Nvidia, the AI kingmaker, set records with $30 billion in Q2 revenue, but its shares fell 9% in after-hours trading after missing forecasts for next quarter. Data centre revenue grew to $26.3 billion, but doubts over potential growth slowdowns and capacity issues remain. The company's gross margin slipped to 75.1% from 78.4%, with further shrinkage expected as costs rise and new projects fall out of VC's favour due to its profit horizon. Adding to the risk, Nvidia's next-gen Blackwell AI chips might face a three-month delay due to design flaws. However, things are looking up after Nvidia announced a $50 billion share buyback, expressing long-term confidence even as market sentiment wavers, especially in the AI business.
EQUITY
The U.S. stock market closed lower on Wednesday, led by the technology sector, with other chip stocks and major tech companies dragging the market down. Investors are now looking ahead to Thursday's U.S. GDP report and Friday's PCE index release, which could provide insights into the Federal Reserve's future interest rate decisions.
GOLD
Gold prices drove lower after being challenged by a strong resistance level at $2528, a few dollars below the all time high as prices consolidated in a high volatility fashion that is expected to severely retrace or keep breaking higher highs. The overpriced nature of gold this season is expected to temporarily benefit from rate cuts before repricing lower.
OIL
Crude oil prices may rebound as they reach a significant support level following two consecutive days of losses, primarily supported by the sudden shutdown of Libyan oilfields given escalating political tensions in the OPEC nation. The production halt, which has affected nearly 500,000 barrels per day, has temporarily overshadowed persistent concerns about weakening demand in major economies like the United States and China. It could, however, potentially reverse due to a smaller drawdown in U.S. oil inventories as the summer travel season winds down.
CURRENCY
The dollar edged higher on Thursday, recovering from recent lows. The euro retreated following preliminary data confirming lower inflation in German states, increasing expectations for more rate cuts. The Japanese yen is steadying after a strong rally earlier in the week, with traders closely monitoring upcoming economic indicators to further confirm a bigger cut or what is promised.
