Nvidia rebound leads broader US market higher


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Nvidia snapped a three day sell off and led the broader market higher as investors remain cautious ahead of key inflation data due out later this week.

The S&P 500 closed 0.39 per cent higher as the tech heavy Nasdaq rallied to finish up 1.26 per cent as Nvidia and other tech names bounced back. The Dow Jones was the only one of the major indices to finish in the red closing down 0.76 per cent.

Nvidia shares bounced back 6.7 per cent after dropping more than 6 per cent in the previous trading session. The chipmaker’s market cap finished back above the US$3tn level. Other big tech names also rallied following the AI giants lead with Meta and Alphabet finishing more than 2 per cent higher on the day.

In other company news, SolarEdge Technologies collapsed 21 per cent after announcing plans for a $300 million private offering of convertible notes. Pool Corp fell 8 per cent after downgrading earnings guidance.

Bank of America reported its clients were net sellers of US equities for the first time in a month last week, with outflows led by hedge funds and institutions as retail investors were on the buy side. From a sector perspective, technology and communications services led inflows whilst Financials saw the largest outflows.

In macro news, investors were surprised by an unexpected surge in Canadian inflation after the BOC’s recent rate cut creating questions about policy going forward. The consumer price index rose 2.9 per cent in May from a year ago, up from 2.7 per cent a month earlier, primarily due to higher prices for services, Statistics Canada reported in Ottawa. That was faster than the median estimate of 2.6 per cent in a Bloomberg survey of economists.

Turning to US sectors, the best performing sectors on the day were Communications Services and Technology which closed 1.85 per cent and 1.79 per cent respectively. The worst performing sectors were Real Estate and Materials which finished the day down 1.41 per cent and 1.28 per cent respectively.

In commodities news, Crude oil futures fell about 1 per cent Tuesday as the recent rally took a breather, with traders watching for summer fuel demand and tensions on the Israel-Lebanon border. U.S. crude oil closed at $80.83 per barrel.

Lithium prices, anticipated to recover, have fallen again this month with inventories increasing amid weak EV demand signals. In China, lithium carbonate spot prices have reached their lowest point since August 2021, following an over 80 per cent drop in 2023 due to oversupply and sluggish demand growth.

In European market news, Airbus shares fell 9.4 per cent after the company said it was cutting its targets for 2024 for both aircraft deliveries and earnings. In the weight loss space, Novo Nordisk rose 4 per cent after the company said that its Wegovy weight loss treatment had been approved in China for long-term weight management. Shares of Zealand Pharma, which is developing its own contender weight loss drug, also rose 8.8 per cent. 

Futures

The SPI futures are pointing to a 0.4 per cent fall.

Currency

One Australian dollar at 7.30am was buying 66.46 US cents.

Commodities

Gold has lost 0.58 per cent. Silver has fallen 2.20 per cent. Copper has lost 1.22 per cent. Oil has fallen 0.98 per cent.

Figures around the globe

European markets closed lower. London’s FTSE fell 0.41 per cent, Frankfurt lost 0.81 per cent, and Paris closed 0.58 per cent lower.

Turning to Asian markets, Tokyo’s Nikkei added 0.95 per cent, Hong Kong’s Hang Seng was up 0.25 per cent while China’s Shanghai Composite closed 0.44 per cent lower.

Yesterday, the Australian share market closed 1.36 per cent higher at 7,838.79.

Ex-dividends
Duxton Farms Ltd (ASX:DBF) is paying 10 cents fully franked
Fisher & Paykel H (ASX:FPH) is paying 21.8442 cents unfranked

Dividends payable
Elders Ltd (ASX:ELD)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

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