- Nvidia’s shares surged as investors expressed optimism before its upcoming earnings report.
- Federal Reserve Chair Jerome Powell will give a speech on Friday.
- China marginally lowered its one-year benchmark lending rate by ten basis points.
Equities ended Monday higher amid gains in Nvidia. The Nasdaq closed more than 1% higher on Monday. The S&P 500 also saw gains. Nvidia’s shares surged as investors expressed optimism before its upcoming earnings report. Other technology-related stocks also experienced increases.
The yield on 10-year Treasury notes reached levels last observed during the 2007 Great Financial Crisis. This happened as investors monitored a meeting of central bankers scheduled for Thursday in Jackson Hole, Wyoming. Federal Reserve Chair Jerome Powell will deliver a speech on Friday.
The technology sector played a significant role in boosting both the S&P 500 and Nasdaq. Additionally, the semiconductor index rose by 2.8%. Among semiconductor stocks, Nvidia led with an 8.5% rise. HSBC raised its price target for Nvidia to $780, the second-highest on Wall Street.
Nvidia price targets (Source: Bloomberg)
Nvidia, a primary beneficiary of this year’s AI tech stock rally, is anticipated to forecast quarterly revenue surpassing analysts’ predictions in its Wednesday report. So far this year, Nvidia’s stock has surged over 220%, while the Nasdaq has risen by 29%.
Quincy Krosby, chief global strategist at LPL Financial in Charlotte, North Carolina, remarked that Nvidia is hailed as the AI brand and emphasized the significance of its performance.
Meanwhile, investors are on edge to hear Powell’s remarks at Jackson Hole. Apprehensions regarding prolonged higher interest rates by the Fed have pushed up US Treasury yields, raising concerns about the consequences on businesses and consumers.
On Monday, European equities broke a four-day losing streak, driven by the energy and mining sectors in response to elevated global commodity prices. In the healthcare sector, Danish drugmaker Novo Nordisk contributed to gains. However, gains in equities were small due to elevated euro area yields. This came as US 10-year Treasury yields surged to 15-year highs, signaling expectations of prolonged higher interest rates.
China, a major consumer of metals and oil, marginally lowered its one-year benchmark lending rate by ten basis points to stimulate credit demand. Surprisingly, the five-year rate remained unchanged, catching markets off guard.
Furthermore, investors eagerly anticipated the Jackson Hole Symposium later in the week. The event will feature insights from ECB President Christine Lagarde and Fed Chair Jerome Powell about the future of interest rates.