Equities: Nvidia stands out as broader tech mood cools – Deutsche Bank

Deutsche Bank strategists say the global equity rally lost momentum near record highs as technology shares weakened. The S&P 500 edged lower and the Nasdaq underperformed, with AMD and semiconductor stocks retreating after recent gains. Nvidia remained a notable exception, while Asian technology-heavy markets also declined.

Record highs meet renewed tech headwinds

"After an initially strong run, the week’s equity rally began to run out of steam by the close yesterday, with the S&P 500 (-0.17%) finishing just shy of the previous day’s record high, whilst the Stoxx 600 (+0.04%) just about edged up to another all-time high."

"That came despite a slew of strong corporate earnings and Iran saying that it has reached agreement with Oman on a proposed route through the Strait of Hormuz. While the timing of any Hormuz re-opening is still uncertain, oil prices are slightly down this morning, while Treasury yields are also dipping slightly after being little changed yesterday amid a batch of mostly solid US data."

"The Philadelphia Semiconductor Index (-1.40%) also gave back some recent gains, though it is still up +6.17% so far this week. Sentiment was not helped by AMD (-7.04%), whose guidance failed to meet some of the market’s more optimistic expectations, whilst SpaceX (-13.61%) also slid following its results the previous evening."

"That said, the broader AI story remains firmly intact. Nvidia (+3.43%) continued to benefit from positive commentary around its next-generation Rubin architecture and after SpaceX said during its earnings call on Tuesday night that it would exclusively use Nvidia AI chips.

"The Kospi (-4.18%) is leading the decline, dragged by chipmaker heavyweights SK Hynix (-6.68%) and Samsung Electronics (-4.55%). The Nikkei 225 (-1.06%), Hang Seng (-1.75%) and CSI 300 (-0.42%) are also down this morning. The S&P/ASX 200 (+0.37%) remains the outperformer, breaking another record high as I type. In currency markets, the yen (-0.03%) is also little changed at 157.71 against the USD this morning."

"In Europe, the performance was mixed yesterday. The Stoxx 600 (+0.04%) and CAC 40 (+0.03%) both edged to fresh all-time highs, whilst the DAX (-0.29%) and FTSE MIB (-0.18%) slipped modestly lower."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)