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This week's market highlights include the Federal Reserve contemplating a pause in rate hikes, Nvidia's remarkable surge in stock prices, a retreat in crude oil prices influenced by OPEC+ and the US Dollar, and the decline of USD/JPY below a key support level.
Explore the details of these significant market movements and their potential implications!
Federal Reserve ponders pause in rate hikes
The minutes from the Federal Reserve's May meeting revealed its 10th consecutive rate rise within a year, setting the federal funds rate to a target range of 5-5.25 percent, its highest since mid-2007. The officials reevaluate their aggressive monetary tightening campaign as they assess how much more pressure the economy can handle to control inflation.
In addition to the lagged effects of the Fed's previous rate rises, the impact of tighter credit conditions following recent bank failures has led to a general consensus among the officials that further rate increases are "less certain".
Trading involves significant risk of loss.
Nvidia stocks ($NVDA) skyrockets 26% on stellar AI chip sales
Nvidia's earnings surpassed consensus estimates for the quarter ending in April, with an EPS of $1.09 against an expected 92 cents, and revenue reaching $7.19 billion, significantly outpacing the predicted $6.52 billion. The company also anticipates sales of roughly $11 billion in the current quarter, over 50% higher than Wall Street estimates.
This strong performance was majorly attributed to "surging demand" for the company's data center products, including AI chips increasingly used by cloud vendors and large consumer internet companies.
As a result, Nvidia's share price spiked nearly 26% this week.
Trading involves significant risk of loss.
Crude Oil price retreats on OPEC+ perspective
The crude oil price plummeted as OPEC+ indicated no intention of adjusting its production targets in the upcoming meeting, contrasting earlier warnings from Saudi Arabia. The US Dollar's sharp rise also influenced the oil market, while concerns over potential supply disruptions due to wildfires in Canada added to the volatility.
As a result, Brent futures settled down 2.7% to $76.25 a barrel. US WTI settled down 3.4% to $71.83. At their session low, both benchmarks were down by more than $3.
Trading involves significant risk of loss.
$USD/JPY fits below 140.00 as USD Index extends further
The USD/JPY pair dropped below the important support level of 140.00 during the Asian session. This decline was influenced by the performance of the US Dollar Index (DXY), which experienced a correction and reached around 104.11 after failing to sustain a recent two-month high at 104.31.
The proportionally larger correction in the USD/JPY pair suggests that the Japanese Yen has also gained strength in the market.
Trading involves significant risk of loss.
This concludes our weekly recap. Have a great weekend and see you next week! 👋
IMPORTANT NOTICE: Any news, opinions, research, analyses, prices or other information contained in this article are provided as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and therefore, it is not subject to any prohibition on dealing ahead of dissemination. Past performance is not an indication of possible future performance. Any action you take upon the information in this article is strictly at your own risk, and we will not be liable for any losses and damages in connection with the use of this article.
RISK WARNING: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. A high percentage of retail client investors lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
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