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Nvidia earnings in focus amid mixed market performance

US stock markets presented a mixed picture on Tuesday, with the Dow Jones Industrial Average rising on the strength of consumer stocks, while tech-heavy indices like the Nasdaq-100 fell. Investors are closely watching Nvidia's upcoming earnings report for insights into AI spending. Asian markets showed varied movements on Wednesday, with Hong Kong's Hang Seng index surging on AI investment news, while European markets were mixed a day earlier following UK defence spending announcements and weak German economic growth data. Gold came down from its recent all-time highs, falling 1.1% on Tuesday to trade around USD 2910 per ounce.

Date
Auteur
Shane Strowmatt, LGT
Temps de lecture
5 minutes

Computer Chip
© Shutterstock

US stocks showed mixed results on Tuesday, with the Dow Jones Industrial Average rising 0.4% to 43,621.16 points, driven by consumer-focused "Old Economy" stocks like Home Depot and Walmart. However, the S&P 500 fell 0.5% to 5,955.25 points, and the Nasdaq 100 dropped 1.2% to 21,087.25 points, pressured by declines in tech stocks. Nvidia shares continued their recent downturn, losing 2.8% amid concerns over upcoming earnings and potential US government restrictions on the chip sector. Nvidia's upcoming fourth-quarter earnings report on Wednesday is anticipated to provide insights into the sustainability of AI investment. Despite concerns over competition from Chinese AI startup DeepSeek, Nvidia's H20 chip demand remains robust.

Bitcoin falls below USD 90,000 amid market jitters

Meanwhile, stocks linked to Bitcoin, such as Coinbase (-6.4%), fell sharply due to a significant drop in the cryptocurrency's value. Bitcoin fell to its lowest level since November, dropping below USD 90,000 on Tuesday, driven by concerns over US tariffs and a recent USD 1.5 billion hack of cryptocurrency Ether from the Bybit exchange. Bitcoin was trading near USD 89,000 on Wednesday morning after losing 4.7% and 3.2% on Monday and Tuesday, respectively.

US Consumer Confidence Drops Sharply

The Conference Board reported on Tuesday that the US Consumer Confidence Index fell by 7 points to 98.3 in February, marking the largest monthly decline since August 2021. The Present Situation Index decreased by 3.4 points to 136.5, while the Expectations Index dropped by 9.3 points to 72.9, indicating a recession signal. The decline was noted across all age and income groups, with significant pessimism about future business conditions, employment, and income prospects. Inflation expectations also surged from 5.2% to 6%.

Hang Seng surges on AI hub plans

Hong Kong's Hang Seng index jumped 3.2% on Wednesday, driven by gains in the consumer and technology sectors, following the city's budget announcement to invest HKD 1 billion into artificial intelligence research and development. There were notable increases in JD.com, Xpeng, Alibaba, and Meituan stocks. Mainland China’s CSI 300 climbed 0.5%. Other major indices in the Asia-Pacific region were mixed on Wednesday. Japan’s Nikkei 225 was trading 0.2% lower, while Korea’s Kospi rose 0.4%. Australia’s S&P/ASX 200 was down 0.1% after the country’s consumer price index came in at 2.5% on the year in January, matching market expectations.

European stocks mixed amid UK defence spending boost

European stock indices showed mixed results on Tuesday. The Euro Stoxx 50 edged up 0.1%, while Germany’s DAX and France’s CAC 40 posted mild losses of 0.1% and 0.5%, respectively. The Swiss Market Index increased by 0.5%, showing some resilience. UK Prime Minister Keir Starmer announced an additional GBP 13.4 billion in annual defence spending from 2027, raising defence expenditure to 2.5% of gross domestic product (GDP). This news propelled BAE Systems' shares up by 4.7%.

German GDP declines in fourth quarter

Germany's GDP fell by 0.2% in the fourth quarter of 2024 compared to the previous quarter, according to data released by the Federal Statistical Office on Tuesday. This decline follows a 0.1% increase in the third quarter. Year-on-year, GDP decreased by 0.4% after price adjustment. The drop was driven by a significant reduction in exports and manufacturing output, despite a rise in construction and final consumption expenditure. Europe’s largest economy has struggled to create growth in recent years as soaring energy prices and difficult trade conditions have hampered its power-hungry and trade-dependent industries.

Corporate and economic calendar

Corporate news in focus: Quarterly figures from AB InBev, Alcon, Beiersdorf, Covestro, Danone, Deutsche Telekom, E.ON, Georg Fischer, Lowe's, Munich Re, Nvidia, Salesforce, and Wolters Kluwer.

Economic data in focus: German GfK Consumer Climate (08:00), Swiss ZEW Indicator of Economic Sentiment (10:00), US new residential sales (16:00).

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Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.

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