Nasdaq Extends Decline as Nvidia Shares Fall Despite Robust Earnings

Global Markets Report - February 25, 2024

Nasdaq Retreats Amid AI Worries

The tech-rich Nasdaq retreated 1.2% on Thursday, snapping a two-day rally, as lingering concerns over the artificial intelligence boom overshadowed strong Nvidia results. Despite Nvidia's quarterly profits more than doubling to $43 billion and projecting further growth, investors turned on the stock, leaving it down 5.5% at the end of the session.

Nvidia's results were good, but investors are worried about the impact of slowing hyperscaler spending on the company's profits. Hyperscalers are spending way more than they're bringing in, and a slowdown in spending will impact everyone along the chain, including Nvidia, which is a big beneficiary of this spending.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

European Indices Advance

In contrast, major European indices advanced, with London setting a fresh record, boosted by a 4.5% rise in Rolls-Royce shares after the company upgraded its guidance, announced a share buyback, and posted soaring annual profits. The CAC 40 index in Paris crossed the 8,600 level for the first time, and Frankfurt also rose.

Asian Markets

In Asia, Tokyo hit a new record, while Hong Kong edged down, and Shanghai was flat. Seoul climbed more than three percent to a fresh peak, led by surges in Samsung and rival chipmaker SK hynix. The Kospi index is now up nearly 50% already this year.

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

Currency Markets

The yen clawed back some losses against the dollar after Japanese Prime Minister Sanae Takaichi nominated two academics to the Bank of Japan board who are considered policy doves.

Key Figures

• Dow: UP less than 0.1% at 49,499.20 (close)
• S&P 500: DOWN 0.5% at 6,908.86 (close)
• Nasdaq Composite: DOWN 1.2% at 22,878.38 (close)
• London - FTSE 100: UP 0.4% at 10,846.70 (close)
• Paris - CAC 40: UP 0.7% at 8,620.93 (close)
• West Texas Intermediate: DOWN 0.3% at $65.21 per barrel
• Brent North Sea Crude: DOWN 0.1% at $70.75 per barrel