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European shares fall as focus turns to Nvidia

22.05.2024 4:00 3 min reading
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European shares fall as focus turns to Nvidia

European stocks fell on Tuesday, pulling away from recent record highs as investors awaited results from Nvidia Corp.

The Stoxx 600 index se humiliate up 0.4%, with GSK Plc among the main decliners due to a costly whistleblower lawsuit. Meanwhile, U.S. stock futures S&P 500 and Nasdaq 100 showed little to no movement. In premarket trading, Palo Alto Networks Inc. fell as much as 8.5% after a disappointing quarterly accounts forecast.

Commodity prices continued to gain attention, with the Bloomberg Commodity Spot Index hitting its highest level since January 2023.

Gold, silver and copper traded near record highs, but the surge did not shake the belief that inflation will ease, potentially leading to interest rate cuts by the Federal Reserve and other central banks later this year.

Nvidia remains the focus of investors' attention as its shares, which have gained more than 90% this year, rose 2.5% on Monday, leading the Nasdaq 100 to a new record high. Nvidia's Q2024 XNUMX earnings report is expected to further fuel AI-driven market momentum. UBS Financial Services' Jason Draho noted that recent data on growth, inflation and the Federal Reserve have provided macroeconomic support, allowing markets to climb higher, and Nvidia's reports could reinforce that positive trend.

Despite a strong reporting season, market watchers are cautious about potential risks. East Capital's Emre Akcakmak pointed out that markets at record highs could be vulnerable to profit-taking if major companies fail to meet earnings expectations. Investors are also watching several central bankers who will speak, including Fed Governor Christopher Waller, whose comments will be closely watched after Cleveland Fed Chair Loretta Mester signaled less likelihood of a significant rate cut.

Trading volumes eased as investors await key events such as minutes from the Fed's latest meeting and Nvidia's results. On Monday, the value of shares traded on the New York Stock Exchange reached its lowest level this year.

Other market moves included flat performance in the Bloomberg Dollar Spot Index and generally lower bond yields. Cryptocurrencies rallied on signs of progress toward US approval of ETFs investing directly in Ethereum.

In Asia, Chinese shares fell, leading a broader decline in Asian shares after seven days of gains. Data from China revealed continued struggles in the real estate sector, with local authorities posting their lowest revenue from land sales in eight years.

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